A complete guide to mobile wallets: 10 things you need to know

By Dr. Danny Fundinger, on


Mobile wallets are a hot topic right now in the mobile space. I have discussed mobile wallets extensively with many clients in different industries around the globe. There are diverse perceptions about what a mobile wallet is, the different flavors it might have and how it can be used—not to mention the challenges related to its design, the complexity of its ecosystems and the business forces behind it. This has led to an almost Babylonian confusion among the different players and stakeholders in the industry, and it can be a major barrier to the success of mobile wallets with users.

Over the last several weeks, I have published a series of blog posts on mobile wallets to provide a deep dive into the concept, functions, and technical and business aspects of mobile wallets. In case you have missed some of the posts, I will end this series with a comprehensive overview of all my posts and the topics discussed in them. I hope this complete guide to mobile wallets sums up everything nicely for you!

Wrap-up: The complete guide to mobile wallets

1. A mobile wallet is the digital equivalent to a physical wallet—a container to store digitized valuables for authorization.

The first key to understanding mobile wallets is getting a good definition of what a mobile wallet actually is and what it is not. In the first post of the series, I share my thoughts on a general definition that is valid for all types of wallets.

2. Mobile wallets can be divided into two major groups: proximity and remote mobile wallets.

This is the major distinction between mobile wallet types. Understanding the difference between proximity and remote mobile wallets is fundamental for any further discussion, because the design, usage scenarios and technical capabilities of these types are very different. I have often seen that clients are not aware of this and expect that there is a “one size fits all” mobile wallet.

3. Umbrella wallets are loosely coupled with various services, while integrated wallets have all services fully integrated.

Knowing the difference between umbrella wallets and integrated wallets is crucial to developing a successful business model. Each of these mobile wallet concepts has different value propositions for potential business partners and stakeholders that provide services for the wallet in the mobile payments ecosystem.

4. The five major types of mobile wallet services and functions are payments, coupons, ticketing, access and identity.

A wallet with no services is useless. To understand the value of a mobile wallet, you need to be aware of the services it is made for—including not just payments but also loyalty programs, transportation and ticketing capabilities, access keys and important identifying information. The combination of these mobile wallet services adds greater significance to the wallet concept.

5. There are numerous opportunities for using a mobile wallet in daily life.

After explaining the theory and concept of the mobile wallet in the first half of my series, I apply the concepts in the daily life of a user named Anna. I show how the mobile wallet accompanies the user throughout the day as she purchases food and tickets, unlocks her home for a cleaner, accesses a company network, enters a stadium for a concert, applies discounts and more. Having everything in one place in the mobile wallet simplifies the user’s life.

6. Mobile wallets provide essential customer data that can be collected and analyzed to the advantage of users and vendors.

Further business value of mobile wallets is hidden in the data. Sharing data of separate services through the wallet can open up a variety of new opportunities for the business.Mobile wallet analytics allows companies to capture data, engage customers and execute personalized offers.

7. The three categories of wireless technologies relevant to mobile wallets are contextual, indoor and geofencing connections.

The interaction of mobile wallet services with the local environment on different levels is crucial for the user. The different wireless technologies and types of mobile wallet connections are introduced and categorized in this post.

8. Companies can choose between proximity and remote mobile wallet types or opt for a hybrid approach.

My experience has shown that for many business scenarios, the capabilities of both wallet types—proximity and remote—are required. In this post I discuss how the proximity and remote mobile wallet types can be combined in a hybrid wallet approach.

9. An analysis of the available NFC-based card emulation strategies is crucial at the start of a mobile wallet project.

NFC is a core capability for proximity wallets, but there are a lot of complex and often hidden dependencies that many clients are not aware of at first glance. These challenges, and potential solution approaches, are discussed in this post.

10. To develop a mobile wallet strategy, companies must define clear goals that align with their business model.

Developing a mobile wallet strategy is a highly complex task for every business. I show in this post how to approach that and set up a successful strategy project.

What do you think? Are there any further aspects of mobile wallets that we should discuss?

I hope this series has helped you to establish a foundation for understanding mobile wallets and to get a better feel for the hidden complexity beneath the surface.

About The Author

Dr. Danny Fundinger

Managing Consultant at IBM Global Business Services

Danny Fundinger is an expert and enthusiast on Mobile Payments and Mobile Wallets at IBM Global Business Services in Germany. As part of the Mobile Center of Competence, he takes an active role in shaping and building IBM's value propositions and solutions for a smarter payments and mobile world. Besides writing and thinking about the frontiers of the mobile age, he supports international clients on mobile strategies and their implementation. Danny has a background in Computer Science and graduated with a PhD at the University of Stuttgart. Prior to his professional career in business and IT consultancy, he spent several years in Russia for research in the academic field of Chaos Theory, where he also gained a lot of practical experience about this topic. An experience, which has made him addicted to the creative challenge of innovation.

Articles by Dr. Danny Fundinger
See All Posts