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Apr 16, 2021
The success of the mobile wallet market was never guaranteed, even after the massive shift to digital payments that took place during the coronavirus pandemic. Amid success stories like Apple Pay, Google Pay and the Starbucks app, there are many wallet apps that failed to gain traction — or squandered it when they did. But there is a lot to learn from their experiences. This story was compiled from reporting by PaymentsSource writers including John Adams, Kate Fitzgerald, David Heun, Michael Moeser and Daniel Wolfe. Bloomberg Pingit and BPay Barclays has a habit of experimenting with new forms of mobile payments, often under the BPay brand. It also had a popular P2P app called Pingit , which absorbed BPay in 2019. As of 2021, both are gone. BPay launched a wearable band or key fob in 2014, before the U.K. rollout of Apple Pay. But while Pingit was able to attract at least 3.6 million users, BPay had users "in the high tens of thousands," a Barclays spokeswoman said in 2019, when Barclays chose to dump the BPay brand. Up until then, the two products required retail customers to download and maintain two separate apps — one for Pingit, which supported P2P transactions and international money transfers, and another for BPay, which let people top up prepaid credit onto wearable accessories for making contactless payments. Pingit will end service on June 30, 2021. As for Barclays, the bank has begun partnering with fintechs to take advantage of open banking . Chase Pay app Chase Pay didn't die quickly. JPMorgan Chase retired its mobile wallet's standalone app in 2019 in favor of a strategy of embedding Chase Pay in the apps of providers such as GrubHub and LevelUp (of which Chase is an investor). In 2021, the other shoe fell, and Chase removed the payment option for online and in-app purchasing in March. Chase Pay app was an embodiment of ChaseNet , a closed-loop system that cut fees by eliminating third parties from processing when both the consumer and the merchant are Chase customers. ChaseNet is a customized processing and end-to-end payments platform built as part of a 10-year agreement with Visa that began in 2013. The Chase Pay app was a single use case for that system, which served more to demonstrate ChaseNet's capabilities than to secure the platform's success. Looked at this way, the Chase Pay app may have seemed vestigial, but Chase still put significant promotion behind it, including a pop-up shopping "village" in New York's Oculus shopping center. Chase said at the time that the promotion was more about "consumer research" than promoting the app for everyday use. Bloomberg Google Wallet 1.0 The modern version of Google Pay bears very little resemblance to Google Wallet , which launched in 2011 — beating Apple Pay to market but gaining little from its first-mover advantage. Originally, Google required that banks become formal partners to be allowed to access a phone's secure element to make NFC payments. Only Citigroup was willing to jump through this hoop. Google updated its model in 2012 to add a lightweight alternative. Banks could simply fill out a form and upload card art; the trade-off is that Google would be the merchant of record for all Google Wallet transactions. This change brought more banks on board, and Google eventually sidelined Google Wallet to bring out the new Google Pay (which it originally called Android Pay). Bloomberg CurrentC When Apple Pay launched in 2014, retailers weren't pleased. They saw Apple's mobile wallet as a way to grab valuable customer data and to lock consumers into paying by card instead of cheaper alternatives like ACH. Walmart, Target, Best Buy and many other prominent retailers banded together to create the Merchant Customer Exchange (MCX), a mobile wallet meant to be used across all their brands. Many of these retailers refused to install the NFC readers necessary to accept Apple Pay, and some even shut off their existing NFC readers in solidarity with MCX. But as MCX tested its wallet app, called CurrentC, Apple Pay steadily won over its stakeholders. A major turning point was Best Buy's decision to announce its support of Apple Pay during one of Apple's earnings calls. CurrentC was tested in Columbus, Ohio, in a yearlong pilot that ended in mid-2016. The wallet app shut down after that, and MCX sold off some of its assets to JPMorgan Chase. ISIS/Softcard What's in a name? Before Apple Pay, there was Softcard. And before Softcard, there was ISIS, the mobile wallet developed by AT&T Mobility, Verizon Wireless and T-Mobile USA. In its early years, the telco-backed mobile wallet seemed to have several key advantages: distribution through carrier stores, control of the devices' secure element, and cooperation from large issuers like JPMorgan Chase and Wells Fargo. But the product's original brand name, ISIS, proved toxic once it became more prominently associated with a violent militant group. The product changed its name to Softcard in late 2014, wiping out all of the brand-building it had done up to that point. Under the new brand, Softcard tried to market itself with the help of a mascot called Tappy, a puppet designed to look like a living point-of-sale terminal. But it wasn't enough. In early 2015, Softcard sold its technology and intellectual property to Google, and quickly shut down. Bloomberg Square Wallet These days, Square is boasting the success of its consumer Cash App, but it took a lot of trial and error to get to this point. In 2011, Square debuted Card Case, which allowed consumers to store a credit or debit card with Square after using it at a Square merchant. The app, later rebranded as Pay with Square, eventually became the Square Wallet before disappearing from app stores in 2014 with the launch of Square Order , an order-ahead app that lasted just a year . That left only Square Cash , a simple email-based P2P system that launched in 2013 with an accompanying app that did little more than help the user properly format emails to the service. Square Cash wasn't integrated with Square's merchant offerings, and to this day it remains Square's only consumer-facing product. Bling Nation In the earliest days of mobile payments, most phones didn't come with the NFC hardware necessary to make contactless payments. Bling Nation's solution was to offer NFC stickers that consumers were meant to attach to their phones. Bling Nation launched its payments service with community banks in 2009 as a competitor to the dominant networks run by Visa and Mastercard. Bling Nation appeared to have chalked up early successes by focusing on community banks and merchants in their local regions. Its big misstep involved launching the loyalty program FanConnect in 2010 and requiring that banks and merchants on its network become part of it. As one banker put it: "It was either you're on or you're off , and a lot of our merchants said, 'Okay, we're off.'" In mid-2011, Bling Nation halted its operations. Bloomberg Weve The U.K. telco-backed mobile commerce venture Weve ended its plans for a universal mobile wallet in 2014. The venture's owners — Everything Everywhere, Telefonica O2OK and Vodafone U.K. — reportedly could not agree on strategy. Weve had made a number of strategic shifts in a short period of time. Following some earlier regulatory hurdles, it debuted in 2012 as Project Oscar with plans to become a SIM-based platform for mobile NFC payments. Later that year, the venture changed its name to Weve and shifted its focus to mobile marketing. Bloomberg suretap Canada’s NFC-based suretap wallet , operated by mobile network operator Rogers Communications and Canada’s CIBC, flamed out in 2015 following faced immense technical challenges. New SIM card models, handset designs and bank requirements came at the project almost every day, but the bigger issue was the business model. What ultimately proved untenable for suretap was the need to guarantee each constituent could deliver some added value to consumers above and beyond existing mobile network or banking services. Bloomberg SmartWallet SmartWallet , an NFC-based mobile wallet launched in Singapore in 2012, linked the local StarHub mobile network operator with leading banks to enable consumers to make contactless purchases on local NFC-enabled retail and mass transit. Banks and mobile operators each demanded their own value-added services, but many of those services fell by the wayside by the simple challenge of building and maintaining the wallet itself. Bloomberg Valyou Valyou , an erstwhile mobile wallet venture launched in 2013 in Norway with Norwegian mobile network operator Telenor and DNB bank, fell victim to a lack of standardization. What undermined this and other mobile wallet projects was a lack of unified purpose. With each stakeholder focused on its own value-adds, the main function of a mobile wallet — shopping, and appealing to merchants — tended to fall by the wayside. Wolfe, Daniel Lemon Lemon, like many early mobile wallets, started out as an app for storing multiple card accounts for easy access and tracking spending. It added a payments capability in 2013, and at the end of the year sold to LifeLock , an identity theft protection company, for approximately $42.6 million in cash. And true to its name, Lemon turned out to be a lemon. In 2014 LifeLock shut down the wallet app (renamed LifeLock Wallet) to address concerns that it was not compliant with the Payment Card Industry data security standard, which describes how companies must protect payment card data. Bloomberg FaceCash Think Computer's FaceCash emerged at a time when countless fintechs were coming to market with ideas for mobile payments — and regulators wanted to rein them all in. FaceCash was one of the casualties. In 2011, the company shut down its California FaceCash merchant network because of the state’s new money-transmission law. The law, called the Money Transmission Act, states companies wishing to do business as a funds transmitter must have a $500,000 tangible net worth requirement and a $750,000 aggregate surety bond requirement to obtain a license. The aggregate surety bond is related to insurance on the funds kept in consumers’ FaceCash accounts. Think Computer said it was able to meet those figures, but that the department's other requirements were never made clear.