Europe’s mobile wallet problem

This entry was posted on Tuesday, February 28th, 2017.

Chris Donkin of Mobile World Live recently penned an article about how mobile wallets are suffering an “identity crisis” in Europe. As Donkin observes, Juniper Research’s latest analysis of the mobile wallet market shows Europe lagging behind almost every region in its transaction value forecast – despite high levels of tech adoption and smartphone penetration.


“Part of the issue may be in the lack of differentiation,” he wrote. “With contactless cards already popular in many European markets, consumers need to see a tangible benefit from using their phone compared to their bank card – either through integration with retail loyalty cards or through an incentive linked to other services being offered by the same vendor.”

According to Donkin, there is definite evidence that loyalty can help make a difference. Indeed, a cross-market study published by Ovum earlier this month reported that 91% of mobile wallet users between the ages of 16 – 24 ranked the ability to manage different loyalty cards in their mobile wallets as either “important” or “very important.”

Meanwhile, Enrique Velasco-Castillo, senior analyst at Analysys Mason, told Mobile World Live that the mobile wallet market in Europe is fragmented.

“Mobile operators compete against banks, device manufacturers and start-ups. For this reason, service differentiation is challenging,” he explained. “There are also signs that users in mature European markets may be experiencing ‘app fatigue’, where most apps downloaded are rarely – if ever—used again.”

Indeed, although roughly two-thirds of millennials have used a digital wallet, most mobile wallets do not yet offer a compelling enough reason for the majority of consumers outside the millennial demographic to leave their credit and loyalty cards at home. As such, the mobile wallet of the future must be part of a new retail future in which an outdated brick-and-mortar paradigm is replaced by a secure, seamless and interactive shopping experience.

For consumers, mobile wallets should combine payments, gift cards, loyalty rewards and coupons in a single retail app for a truly frictionless commerce experience. For retailers, mobile wallets should offer tangible value beyond the initial transaction by facilitating lucrative upselling and cross-selling opportunities with integrated loyalty points and coupons. In addition, consumers require assurances that their mobile payment information will remain secure. Similarly, stores and financial institutions need to be confident that the technology behind mobile payments is secure and easy-to-use before it can be truly embraced.

Clearly, mass adoption of mobile payments will only be achieved when there is a single, unified platform built on an economy of digital trust that ensures an uninterrupted physical to digital experience.

Interested in learning more about mobile wallets? You can check out our mobile payments product page here and our eBook below.

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