9 defunct mobile wallets — and why they failed

August 23, 2019 10:37 AM

The success of the mobile wallet market was never guaranteed, especially in the U.S., where the concept took on many forms in recent years.

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.

Chase Pay (standalone app version)

The Chase Pay platform is still alive and well, but its standalone mobile app is being retired 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).

The Chase Pay app is 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 is 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.

The Google Inc. Mobile Wallet application for cardless payment is displayed on a smartphone screen at the Mobile World Congress in Barcelona, Spain, on Wednesday, Feb. 29, 2012. The Mobile World Congress, operated by the GSMA, expects 60,000 visitors and 1400 companies to attend the four-day technology industry event which runs Feb. 27 through March 1. Photographer: Chris Ratcliffe/Bloomberg

Chris Ratcliffe/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).

The CurrentC application (app) is demonstrated on an Apple Inc. iPhone 5s for this arranged photograph in Washington, D.C., U.S., on Thursday, Oct. 30, 2014. CurrentC, the retailer-backed mobile-payment system touted as an alternative to Apple Inc.'s platform, was hacked during a test of the technology, resulting in some e-mail addresses being stolen. Photographer: Andrew Harrer/Bloomberg

Andrew Harrer/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.

Wolfe, Daniel

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.

Valerie Soranno Keating, chief executive officer of Barclaycard, the consumer credit-card division of Barclays Plc, wears the company's new bPay PayBand, a wearable contactless payment device, during a Bloomberg Television interview in London, U.K., on Friday, June 13, 2014. The pound reached the strongest level in 19 months against the euro after Bank of England Governor Mark Carney said the institution may raise interest rates from a record low earlier than investors expected. Photographer: Chris Ratcliffe/Bloomberg *** Local Caption *** Valerie Soranno Keating

Chris Ratcliffe/Bloomberg

BPay

Barclays has a habit of experimenting with new forms of mobile payments, often under the BPay brand. But its P2P app, Pingit, proved to have more staying power.

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 has users "in the high tens of thousands," a Barclays spokeswoman said in 2019, when Barclays chose to merge the two products and dump the BPay brand.

Up until then, the two products required retail customers to download and maintain two separate apps — one for Pingit, which supports peer-to-peer transactions and international money transfers, and another for BPay, which let people top up prepaid credit onto wearable accessories for making contactless payments.

All BPay functionalities were migrated over to Pingit as part of the rebranding.

The Square Inc. Point of Sale application is displayed for a photograph on an Apple Inc. iPhone in Washington, D.C., U.S., on Friday, Feb. 16, 2018. Square Inc. is expected to release earnings figures on February 27. Photographer: Andrew Harrer/Bloomberg

Andrew Harrer/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 P-to-P 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.

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 (now called 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.

California State Capitol buildings and flags

The American, California State, and POW/MIA flags fly in front of the California State Capitol building in Sacramento, California, U.S., on Thursday, March 30, 2017. California Governor Jerry Brown and legislative leaders proposed a plan to raise taxes and levy new fees to pay the bulk of $52.4 billion in transportation projects over 10 years. Photographer: David Paul Morris/Bloomberg

David Paul Morris/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.