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1.1 Background and History

Mobile and digital wallets have proliferated since 2007 as companies aimed to improve payments. Early innovators were financial startups enabling in-app payments, while mobile carriers partnered in 2010 to realize NFC mobile wallets. Stripe also launched in 2010 to simplify online card payments for merchants. Many merchant wallets then launched from 2011-2012 as the MCX consortium formed with plans for a multi-merchant wallet. Apple Pay's 2014 launch was significant, though Google Wallet predated it in 2011. Retrenchment in 2016 saw changes as Android Pay launched, Softcard and MCX shut down, and bank wallets grew.

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Ahmed Hwaidi
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35 views2 pages

1.1 Background and History

Mobile and digital wallets have proliferated since 2007 as companies aimed to improve payments. Early innovators were financial startups enabling in-app payments, while mobile carriers partnered in 2010 to realize NFC mobile wallets. Stripe also launched in 2010 to simplify online card payments for merchants. Many merchant wallets then launched from 2011-2012 as the MCX consortium formed with plans for a multi-merchant wallet. Apple Pay's 2014 launch was significant, though Google Wallet predated it in 2011. Retrenchment in 2016 saw changes as Android Pay launched, Softcard and MCX shut down, and bank wallets grew.

Uploaded by

Ahmed Hwaidi
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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1.

1 Background and History


Since 2007, innovations in mobile and digital wallets have resulted in a proliferation of wallet models and
solutions, all intended to improve consumer convenience, leverage data, serve up offers, lessen friction,
or lower the cost of payments. The earliest wallet innovators, staring around 2007, were financial
technology companies. Startups, including Braintree, Klarna, and Ayden, were launched to solve the
problem of enabling in-app and m-commerce payments. In 2010, AT&T, Verizon, and T-Mobile formed
Softcard (formerly Isis) to realize the vision of a Near Field Communication (NFC) wallet with payment
credentials securely provisioned in the secure element (SE) by the mobile network operators (MNOs).
That same year witnessed the launch of Stripe. Stripe reduced the amount of time it took a new merchant
to accept online card payments from weeks to minutes. A flurry of merchant wallet introductions
followed, including LevelUp and Starbucks in 2011, and Dunkin’ Donuts in 2012. Also in 2012, the
Merchant Customer Exchange (MCX) consortium was created, with the intent to launch a multi-merchant
mobile wallet, called CurrentC. MCX, owned by more than a dozen large U.S. retailers comprising
convenience store, fuel, grocery, big box retail establishments, and restaurants, claimed to serve nearly
every smartphone-enabled American and account for approximately $1 trillion in annual sales. October
2014 marked a seminal moment in the history of mobile wallets with the announcement of Apple Pay.
Although Google had announced the first device-centric NFC wallet, Google Wallet, in 2011, the industry
had been eagerly awaiting Apple’s technology decision. In 2016, a year of retrenchment, Google recast its
wallet for person-to-person (P2P) purposes only, Android Pay was launched, Softcard shut down and sold
its assets to Google, and Amazon closed down its mobile wallet. At the same time, a proliferation of bank-
centric wallets appeared (Capital One, Chase Pay, and Wells Fargo). Walmart Pay was launched at almost
the same time that MCX apparently shut down after a series of delays and bad publicity.
Figure 1 illustrates the chronological development of mobile wallets.

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