Every week the Opus team picks a news story or topic or idea that is relevant to the entrepreneurs and businesses we partner with.

RSS Feed

Archives

The Digital Wallet Wars

Ajit Deshpande - - 0 Comments

Last week, global payments technology leader Visa announced it had added Overstock.com, its biggest online retailer partner yet, as a user of its V.me digital wallet. With over $1 billion in annual online sales across a variety of categories, Overstock represents a significant addition to V.me’s current list of 34 retailers, which includes LivingSocial and 1-800-FLOWERS. In addition, Visa also announced last week that it would introduce a fee for ‘staged’ mobile and digital wallet operators such as Google, Intuit and PayPal.

So the digital and mobile wallet wars are in full swing as PayPal, Google, Mastercard, Square, Visa, Isis, LevelUp and others continue to jostle with each other for customer attention in what is clearly a fragmented market. In parallel, these wallet providers continue to build their two sided networks, consisting of online retailers on one hand and card issuing banks on the other hand. It is difficult to pick a clear winner here, since each participant has its own unique value proposition for customers and merchants. PayPal, MasterCard and Visa offer the experience of knowing the payments space for years. Isis represents the collective clout of AT&T, Verizon and T-Mobile. Square and LevelUp are the upstarts that seem to have cracked the SMB segment. And Google is, well, Google (plus Sprint plus Citigroup btw). So, as NFC adoption accelerates, we can expect the major banks and the major retailers to partner with all of these major wallet players, and at the same time try their own wallet offerings, resulting in one big free for all. And Visa’s fee surcharge announcement from last week might just be the beginning of all this…

So who might have a chance at benefiting from all this? It will probably be the arms dealers – current and next-gen Secure Element players such as Gemalto, NXP and ARM, and Trusted Service Manager players such as Opus portfolio company Sequent. But even more so, it could be the end customer, the one who now gets the opportunity to move towards a world with quicker transactions and fewer paper receipts and more actionable intelligence. And as long as that actually happens, this will be transition well done.

 

« Back to Blog
Also on the Opus Blog

Instagram bests Twitter in Mobile Engagement

October 1, 2012
Ajit Deshpande - Earlier this past week, comScore reported that Facebook-owned photo-sharing site Instagram had surpassed Twitter in terms of daily active users for their respective smartphone apps...

Outlook.com is off to the races!

August 5, 2012
Ajit Deshpande - On July 31st, Microsoft unveiled its new cloud-based email service, Outlook.com, complete with a simple and clean UI and featuring integration with its own SkyDrive as well as with...

Consolidation at Point-of-Sale

December 4, 2012
Ajit Deshpande - Last week brought news of consolidation in the POS system segment – National Cash Register (NCR) Corporation announced its $650M acquisition of Retalix, a developer of software...

The Nest Acquisition

January 23, 2014
Ajit Deshpande - Last week saw one of the largest venture-backed private company acquisitions in recent memory, when Google purchased smart thermostat and smoke detector maker Nest Labs for $3.2...