Consumers will decide which mobile wallets they want to use and that is why financial institutions should participate in as many as possible, a Citigroup Inc. executive on Oct. 12 told attendees here at the BAI Retail Delivery conference.
Citi currently is the only bank participating in Google Inc.'s Near Field Communication-based mobile-payment effort. But Dickson Chu, global head of digital networks and mobile for Citi, said he expects others will join Google Wallet and believes the participation of multiple financial institutions will help drive consumer adoption.
"This is an open wallet and it should be," Chu told attendees at one of the most well-attended sessions. "No consumer wants to sign up for just one thing."
Indeed, Google will compete with Isis and other more established mobile-wallet providers as NFC phones become more widely available.
Isis, which is a joint venture between AT&T Inc., Verizon Communications Inc. and T-Mobile USA, faced some criticism early on when it appeared it would partner solely with Discover Financial Services. Isis has since made deals with all the card networks.
Chu revealed that Google's commitment to developing an open system is what helped spark Citi's interest in becoming an initial partner. Google believed that it would take more than a single financial institution to help build its wallet and someone had to step forward and invest funds into an endeavor that was going to be more than just a trial, Chu said.
Chu is now urging other banks to embrace the idea of an open system.
"Take the consumer point of view and get in the wallets where your customers want to be," he said.
Dominic Venturo, chief information officer for payment services at U.S. Bancorp, agreed with Chu's plea to financial institutions.
"We have to get past [the idea] that there will be one option," he said. "Customers don't want that. That fundamental customer choice is the key to getting this out there."
First Data Corp., which is the trusted service manager for Google Wallet, may take the concept of open systems and variety in the market even further.
First Data is not bound exclusively to Google Wallet and is available to work with other mobile-wallet providers, Ed Labry, president of First Data North America, told PaymentsSource at the conference.
"Just because Google is first to market is not to say others will not come and consumers will not have multiple wallets in their phones," he said. "We think banks and certain retailers will have their own wallets."
And what those mobile wallets bring to consumers could include more than the ability to do payments at the point of sale.
Labry reiterated a common theme emerging in discussions about NFC-based mobile payments: The potential effect of marketing offers.
Other mobile wallets that may be developed do not necessarily have to include a payment function but "you'll have couponing, loyalty programs and even tickets that can be downloaded to the phone," he said.
