What is a Mobile Wallet? - Consumer Technology
November 12, 2014
Perhaps you are skeptical about mobile wallets and if your Credit Union membership will adopt them. If so, you have come to the right place. This is a 5-part post that will explain the basics of mobile wallets and how they will impact your membership.
First, a mobile wallet, just like a normal wallet, will have lots of different versions. Instead of Velcro, leather, a money clip or rubber band, members will have many different options and choices and one size probably won’t fit all. A mobile wallet is a digital version of your normal wallet that sits on your smartphone and replicates much if not all of the functionality of your old physical worn out wallet.
Once you get over the shock that the first one was actually created by IBM in 1992…we can fast forward to what I think most of us would consider the first “useful” smart phone which really got mass adoption when Apple launched the iPhone in 2007. Yup – just 7 years ago. Now we probably couldn’t go without it for more than a few minutes. The technology behind the mobile wallet has been advancing along the same lines. We believe there are three areas of technology that have come together to create mobile wallets. The first is smart phone technology, which includes things like app stores, digital cameras, GPS tracking, graphical representations of the wallet, and real-time connectivity to your financial institution.
Second, there are security features. These include:
- Secure Elements
- Fingerprint Scanners
Third there are payment settlement mechanisms including:
- NFC (Near Field Communication)
- Blue Tooth Low Voltage
- QR Codes
Each of these along with the basic app store and operating system on the phone enable different flavors, security, functionality and adoption of Mobile Wallets. The trick is finding the right combination that takes into account what members are ready for, what is widely available, and what works right now. All of this will change with breakneck speed…just like the explosion of smartphone technology. No one Mobile Wallet will win 100% of the market.
The CU Wallet mobile wallet today is a combination of a smart phone with QR code technology and Tokenization. This will change quickly though and is already built to support NFC and Blue Tooth functionality. Shortly it will support fingerprint authentication and someday may support additional features through the use of voice recognition, facial recognition, geo positioning, and secure elements.
These technologies establish the baseline of a platform that will allow for a never ending increase in functionality that can be provided and innovated on behalf of the consumer. Credit Unions need to begin adopting and planning for this change as it will occur in the blink of the eye and we are already late to the game.
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