Microsoft Wallet Abandoning Mobile Payments Market

January 28, 2019         By: Steven Anderson

Most markets experience a period of intense growth followed by a winnowing out of certain elements of the market, especially as some firms find the returns not worth the effort, or that they merely can’t compete. Mobile payments are no different, and we’re finding out that even some of the biggest firms out there aren’t immune. A post on Microsoft’s website revealed that the Microsoft Wallet app was to be “officially retired” on February 28.

There was no official explanation why Microsoft pulled the plug after just two and a half years in the field, but given that Microsoft also noted that Windows 10 Mobile was also losing support December 10, there may be a larger exodus in play here away from mobile technology in general. Considering that only a scant handful of phones actually operate Windows 10 Mobile, that may also have something to do with it. Indeed, reports suggest that Microsoft Pay isn’t completely dead after all, and will still work for online purchases made through the Microsoft Edge browser.

451 Research’s Jordan McKee offered some insight to Digital Transactions News, noting “The primary issue comes down to operating system market share. With iOS and Android operating systems dominating the smart-phone industry, the addressable market for the Microsoft Wallet was rather limited. Layer in the already low consumer adoption rates for contactless mobile payments and it is clear that the Microsoft Wallet was doomed from a user-adoption standpoint from the start.”

It’s conceivable that Microsoft is just conceding the mobile market. Given what we’ve already seen so far and knowing that Microsoft was late to the mobile party as it was—let alone that it really couldn’t bring anything sufficiently advanced to the table to make it worth throwing over Android and iOS, the two frontrunners—it’s not out of line to believe that Microsoft just decided to cut bait and focus on other markets within its purview.

It’s actually one of the biggest reasons firms depart a market, and though Microsoft probably could have held out longer and tried to develop its mobile properties better, it may not be out of line to say Microsoft just missed this particular boat.