Bytemark’s Justin Deno - Mobile Wallets: Where’s the Value?
September 10, 2024
By: Justin Deno
Startups and mobile wallets don’t mix. Mobile wallets are for the Googles, the PayPals, and the carrier conglomerate – Isis. You need billions backing you up: convince the merchants, prepare for daunting POS integrations, get the users, marketing - marketing - marketing. It’s the chicken or the egg problem. Merchants will only adopt it if consumers have it. Consumers will only use it if merchants accept it.
This is the confession of a startup that learned these lessons the hard way - startup that attempted to scale the mobile payments mountain in a t-shirt and flip-flops. We made the assumption of “why would people NOT want to pay with their phone?” Telling ourselves that “we just have to be first to market with this and people will eat it up!” We were paranoid, convinced that our fate depended on launching before NFC payments hit the US market, or before PayPal came out with something of their own. Obsessively following the movements of the major players knowing that at any moment one of them could release a simplified QR code method, NFC mobile wallet, web payment button, or whatever, and take the whole mobile payments market in one fell swoop. We were mesmerized by every new device released, devising plans around emerging features, and teetering on edge with NFC-phobia during iPhone season.
But step back from the mobile wallet hype for just a minute and put your skeptic-shades on because the neato-tech factor truly is blinding. Ask yourself this: are we pushing technology for the sake of technology or is there a purpose behind it; to whom is this useful? Is it easier to swipe a credit card upon checkout or launch an app and pay via mobile? There’s essentially no difference, the time differential is negligible, and the “friction” - everyone’s favorite industry term - is essentially the same. So where’s the value in a mobile wallet?
A successful mobile wallet… A successful product needs to solve a problem.
The problem that needs solving is two sided: mobile wallets must provide solutions for both consumers and merchants. Consumers need a mobile wallet that is efficient (time saving), easy to use, and offers benefits that traditional payments do not. Merchants look at mobile payments and see a headache waiting to happen; it’s an additional layer of complexity to integrate into their POS systems and another training session for employees. “Don’t mess with the checkout ritual!” they say. For mobile wallets to make sense there needs to be an incentive for merchants that equate to tangible benefits and cost savings.
A startup looking to enter the world of mobile payments needs to find value in a niche. They need to solve a specific problem and offer a simple solution that benefits all stakeholders. Don’t let your technology overreach the user - innovate with a purpose.
Our mobile wallet never really took off, so we changed it. We took the knowledge, tools, and experience we built during our early mobile wallet crusade, and applied it to an industry that was in dire need of a solution. As a New York based startup we were quite familiar with taking public transportation to get to and from the office. That same familiarity extended to ticket vending machines that failed to work and long lines resulting in missed trains, busses, and boats. This was a problem looking for a solution. We transformed our mobile wallet prototype, built it for a specific use - mobile transit ticketing - and developed features beneficial to both the user and the transit organization.
It’s unclear when mobile wallets will truly take off and that’s ok because there’s still a lot that needs to be shaken out. The foundations that will allow for major mobile wallets to grow are only beginning to form. But mobile payments won’t be successful if they are built merely on a precipice of flashy technology. There needs to be tangible value supporting this venture. There needs to be a purpose behind it.
Bytemark is a New York City startup with offices in the UK and Australia. Bytemark’s flexible platform provides mobile ticketing and payment solutions for transit, tourism, and events. Bytemark launched the first mobile ticketing app for a major U.S. transit agency with the release of the NY Waterway app in January 2012. Transit in the U.S. has been underserved by the expansion of mobile technology and Bytemark seeks to bridge the gap between the transit industry and America’s growing technology sector.
About Justin:
Justin Deno is a graduate student in the Graduate School of Arts and Sciences at NYU. He is a business development manager at Bytemark, a NYC based tech startup that specializes in mobile ticketing and payments. Justin provides strategic direction for Bytemark’s marketing and business efforts. As a graduate student his studies are focused on the convergence of technology, business, and culture.
