Analysis: E-wallet Cold War shows signs of thawing

At last month's Mobile World Congress, e-wallets took a few more strides towards ubiquity. Peter Gothard identifies this year's major m-commerce players, and the leading offerings

Telcos and banks have been quietly beavering away at e-wallet solutions for several years now. Computing last tackled the e-wallet issue in depth back in July 2012 - two months before the iPhone 5, and when general industry expectation seemed to point to Apple including NFC (near-field communication) hardware in its next handset release.

While this didn't happen, and NFC seems to have remained the province largely of excited techies waving their phones at MWC's entrance gates, the past few months have seen a significant tactical shake-up of ecosystems. While before telcos and banks worked separately, there are now deals being done between them, as well as with hardware manufacturers.

At MWC, Visa and Samsung announced a partnership that could see every Samsung smartphone feature native support for Visa's NFC-based payWave app. Given the massive popularity of Samsung's devices - as evidenced by the huge interest in last week's Galaxy S4 launch - this alliance looks like a major coup for Visa.

"We all know that the centre of commerce will be these devices," said Jim McCarthy, head of global product at Visa. "It's not just about using these devices to pay, but also the fact that today in the Visa ecosystem we have 30 million merchants. The fact is there are over seven billion of these devices that can be turned into terminals and turn consumers into merchants for payment."

Meanwhile, PayPal used MWC to unveil a device that will take it into direct conflict with Visa on the high street.

Called PayPal Here, it's an app-activated, wireless chip and pin terminal that effectively lets anybody take a cash card payment at any time, with only a three per cent charge from PayPal for doing so. PayPal UK's Rob Skinner described it as PayPal "moving into the real world", its facility for bespoke reward bonuses and other customer incentives being, said Skinner, "much more than just about payments".

Skinner said his company remains unfazed by a major credit card company climbing into bed with a massive smartphone manufacturer.

"There's room for many ways to pay, but I think the ones that get most traction are the ones customers find easiest, most convenient and safe," said Skinner. "But what I'd say about PayPal is we've grown to the size we are today [PayPal processed £9.4bn in mobile payment volume in 2012 - more than three times the mobile payment volume of $4bn it processed in 2011] by providing that kind of service; solving that kind of problem."

During its announcement, Visa made a great play of its 600,000 European merchant locations with NFC facilities, but Skinner downplayed the significance of NFC, pointing to the fact that Apple has yet to persuaded that it needs to support the technology.

"We remain open-minded about NFC," said Skinner. "We work with it through our Android app, but we do think that the fact that Apple hasn't built NFC into the current iPhone actually tells you something. We do take a similar approach to Apple in the sense of asking ‘How can we use technology to solve real problems, and how can we serve real customer needs?'."

MasterCard, meanwhile, may have come up with the least sexy m-payment solution, but that's not to say it isn't a real contender. Chief of emerging payments at MasterCard, Ed McLaughlin, described MasterPass as representing a world where "there's no e-commerce or m-commerce… just commerce".

Currently rolling out in Australia and Canada, and due to hit the UK later this spring, MasterPass is an attempt to roll together every method of payment or redemption - cash, vouchers, address books and several types of credit or debit card - into a unified service, spanning app, internet, NFC, or even QR codes and telephony. It also benefits from partnerships with the likes of Citibank in the US and Australia's Commonwealth Bank.

MasterPass is the product that best sums up the stage e-wallets are reaching, with the squabbling chieftains of the various stakeholding tribes finally sitting down to discuss - and even resolve - the barriers that have held the technology back in recent years.

@PeterGothard