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It was the best idea and the worst idea, it was an age ready for mobile wallet wisdom, it was an age foolish enough to think it could pull it off, it was an epoch of belief in mobile wallets, it was an epoch of incredulity in the failures that surrounded us. It was a season of light (the flashlight on an iPhone is quite powerful), it was a season of darkness (but my battery ran out in minutes), it was the spring of hope that someday we would pay with our phones, it was the winter of despair that still, most of us, had an old iPhone that didn’t support Apple Pay. We had everything before us, surely we could figure this out, we had nothing before us except the most fragmented payments market in the world. We were all going direct to Heaven, where even T-Mobile got a good signal, we were all going direct the other way, whatever it took to get merchants to let use use our phones to pay.

What Really Is A Mobile Wallet? Single Merchant Model vs. Consolidator Model.

The mobile wallet wars of 2016 may lack some of the literary drama of Dickens and his classic “A Tale of Two Cities” but nonetheless, it is a story filled with heroes and goats. The two players in the mobile wallet game? Those that want to pay everyone, and those that want to solve a single business’ payment challenges. Put simply, in this tale of two mobile wallet models, businesses are gaining the greatest traction. Instead of Apple Pay (consolidator model) think about the Starbucks app (single merchant model). If you don’t think of the Starbucks app as a mobile wallet, consider broadening your definition. Paying all merchants from a single mobile wallet is a pipe dream today. Solving a single business’ payment issues is already happening all around us. From well-publicized examples such as Starbucks, to much smaller businesses that don’t get press, businesses everywhere are out there publishing mobile wallet apps. They are changing the landscape of the mobile wallet.

Who would have thought that in the end, it would be individual businesses that would make the most progress the soonest? Well, so be it.

Businesses Get Paid Faster. Processing Payments is Cheaper. Paying is Convenient and Fun For Customers.

The driver? Getting paid faster. And getting paid cheaper. The best way to accomplish this in today’s world is to put a mobile app in the hands of the business’ customer. Push the receivables challenge faced by the industry for years all the way out to the actual person who pays, in a way that is more intimate and personal than ever before. Electronic payments are not new; what is new is integrating invoicing, receipts, payments and collections into a single solution centered around the small business. The business who publishes an app for its customers. The best way to get paid faster is to publish an app and drive your customers to this cheaper and more efficient channel.

Solution: A mobile wallet for small businesses powered by a community financial institution.

Community banks and credit unions will enable this trend. They are in the best position to empower local businesses with a mobile wallet. The single merchant model beats the consolidator model. Banks and credit unions already offer various services to help businesses collect payments from their customers. It’s natural for a bank to help the business tackle the question of how to publish a mobile wallet that is payment centric, one which helps them get paid faster and cheaper. The banks and CUs already maintain a large network of customers within the local business community, both on the lending and deposit side. These are the very businesses who can benefit from publishing an app and giving their customers a payments-centric mobile wallet.


Robb Gaynor, Chief Product Officer Malauzai Software robb.gaynor@malauzai.com