Max Wolff, economist and managing partner at Manhattan Venture Partners, talks about the dynamics and recent history of digital wallets and how the space may play out in the future. Great data points and summary of a fragmented market with many players.
Lack of a universal technology standard, disparate interests of stakeholders, and poor user experience, have severely limited adoption and growth. Apple Pay has begun to change this, quickly, given the short and still limited rollout of the service. Google’s recent moves with SoftCard from AT&T, T-Mobile and Verizon and Samsung’s purchase of Loop Pay suggest the future is arriving fast. Fortunately for the industry, a perfect confluence of contextual realities has formed to allow rapid evolution of wide spread digital wallets adoption. The secular facts on the ground are: near-ubiquitous presence of NFC (Near Field Communications) POS terminals; October 2015 deadline for retailers to upgrade to Europay Mastercard and Visa (EMV) enabled POS terminals; and several massive hacks costing merchants and banks millions while driving up interest in newer, safer, payment.