Magazine article Independent Banker

Hearts and Wallets

Magazine article Independent Banker

Hearts and Wallets

Article excerpt

In December, Walmart Stores Inc. joined a long line of contenders to offer consumers a mobile wallet payment option. Yet if what researchers find is true, banks have an enormous edge over nonfinancial companies in gaining consumer acceptance for their mobile wallet offerings.

Although retailers are leaping into the mobile wallets fray, consumers seem wary. A 2014 national study by CCG Catalyst Consulting Group found that only 3 percent of the consumers surveyed said they trust major retailers as mobile wallet providers, while 32 percent said they don't trust them at all. On the other hand, in the same study published in October, 51 percent of the 2,000 consumers surveyed said they would be likely to use a mobile wallet if their bank offered one.

"The study reaffirms that a bank is still a trusted resource to consumers," says Paul Schaus, CEO and president of CCG Catalyst, located in Phoenix, Ariz. "Banks have built a strong foundation of trust in handling people's money. So let's not lose sight of what the industry has built over all these decades."

Mobile wallets are a hard concept to define, simply because each offering is a little different.

Linda Echard, president and CEO of ICBA Bancard, ICBA's payment services company for community banks, defines a basic mobile wallet as having "payment accounts in the wallet that allow you to pay without a card-and that means both in-store and online."

While ICBA Bancard wants community banks to have as wide an array of choices as possible, so far the organization has endorsed only two wallets-the ones offered by Visa and MasterCard. Echard emphasizes that both are easily available and quite affordable.

"The advice we've given community banks is that they may want to invest in the brands that are trusted by consumers as financial brands," Echard says. "And that would be Visa or MasterPass by MasterCard. …

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