Credit unions have found a new place to add value in the mobile wallet wars. They can help local businesses launch mobile wallets and help those businesses be just like a very friendly coffee company we all have come to know and love, or at minimum, admire. The most successful mobile wallet has become very popular very quickly, and it has achieved this success in a quiet way. While some mobile wallet providers such as Samsung and Apple (referred to collectively as "The Pays") have made loud splashes when launching their offerings, the most successful mobile wallet is not even considered a true mobile wallet by many industry pundits.
What is this fabled wallet? Who makes it and where do you get it? Well, I hope you like coffee, because it's Starbucks. More than 20% of the company's payments now come through its mobile app. And, it is rapidly adding features like Order-Ahead and strengthening its loyalty programs. Rather than wait for the future promise of mobile wallets, Starbucks did its own thing. The Pays have failed to take the world by storm. Yes, someday we may use a single mobile wallet loaded up with all our cards, to make payments everywhere. But that day is not today. And, that day is probably not even coming soon. Enter business-specific mobile wallets. Enter Starbucks, and all of the other businesses that are following suit.
So why does a business want to pursue launching its own mobile wallet? It could be streamlining payments and making them cheaper. Processing a credit card or debit card is expensive. If the business can move its payments to other clearing mechanisms (like stored value or ACH) it could save money. The motivation for a stand-alone business mobile wallet could be to be cool and innovative. While others are waiting for the big infrastructure players to figure out mobile wallets, companies like Starbucks, Walmart and CVS are doing their own thing and delivering innovative, convenient solutions for their customers. These businesses can control much of their payments infrastructure and make real progress while others are waiting – waiting for new terminals that take mobile payments or waiting for enough smartphones to be sold that support mobile wallet payments. Well, some businesses are done waiting. They want to innovate and save money today.
Recommended For You
Businesses in fact can't wait. As the first brave businesses get into the mobile wallet space, others will be forced to follow suit. We witnessed this same phenomenon when tracking the growth of mobile banking apps for credit unions. Five years ago, there were 100 mobile banking apps in the Apple App Store. Now there are more than 6,000. Almost all credit unions with more than $100 million in assets have an app. And businesses will follow suit; they want cool, native apps like they are used to using themselves. By various estimates, there are 26 million businesses in the U.S. Thirteen million of them have a website. These businesses are going to want mobile apps with payment capabilities, or what we shall call business mobile wallets. And, one important point – it is true that no consumer will want to have 50 different mobile wallets on their smartphone, one for each business. This makes no sense. It sure would be easier to have one app to pay everyone. But in spite of this fact, the reality today is businesses are already publishing their own apps and a few of them like Starbucks have added payments. The question is, will The Pays and other large, famous mobile wallet providers ever be relevant? If it takes them too long to solve the large infrastructure obstacles they have in front of them, business mobile wallets may gain too much ground and may never be replaced. The Pays should be nervous.
How does a business go about publishing a mobile wallet? There are a dozen different companies out there making tool kits and app builder services. Just Google it. For $30 a month and up you can build and publish an app. Some are even cross-platform so you can have iPhone, Android and tablet apps, all by using a single toolkit. The apps do tend to be simple, and none of them are true mobile wallets allowing payments, though a few have credit card payments embedded (an expensive option). These apps are focused on information and content, not transactions. What happened to websites, which are very cheap to publish today, has very rapidly happened to mobile apps. Using one of these tools, a business can publish an app and engage its customers electronically. It can develop and execute its own digital strategy.
And interestingly, credit unions can help too. Some credit unions are strengthening their member business services offerings by including mobile wallet publishing. The credit union can help the business get in the App Store and Google Play. How? By using its current mobile banking provider. A good mobile banking offering can be quickly repurposed for these business mobile wallets. Most vendors can do this today, they just need to be asked.
Here is one additional twist: Credit unions are using these concepts too. It turns out many credit unions have a member payment problem and need a mobile wallet of their own. When the member does not have a deposit account but has a loan, how do they pay down that loan? As indirect lending has grown as a source of fee revenue in the past decade, this payment challenge has emerged and become more obvious. Now it can be solved. A credit union can publish its own mobile wallet focused on members who only have loans. That can make it easier to make payments. Some credit unions already have this feature on their websites, so this just extends the idea to a mobile app, giving the member one more choice when making loan payments. This mobile wallet payment app for non-deposit members sits right alongside the credit union's primary mobile banking app. It's another example of removing resistance and making payments easier.
The mobile wallet wars are continuing to evolve without question. And now, leading the charge are individual businesses. Everyone wants to be like Starbucks and have their own mobile wallet. And it can be done. The technology exists and credit unions can get directly involved by helping their business members collect payments and publish apps. Business-specific mobile wallets are dominant today and set to retain this dominance for some time to come. Innovative credit unions already deeply embedded in their local communities can make this happen by enabling local businesses to be successful with their mobile wallet strategies.
Robb Gaynor is chief product officer of Maluazai. He can be reached at 512-961-5699 or [email protected].
© 2025 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
