Who doesn’t love mobile wallets? They’re convenient, safe, and easy to use. When it comes to implementing one as an issuer to offer to customers, things become slightly more complex, which is why we have created our handy guide to mobile wallets.
We’ll be covering one of the guide’s topics in this blog post: Which mobile wallet is right for you? We’ll have a look at the different types, respective advantages, and things to keep in mind when assessing which wallet best fits your situation.
Before you decide what type of mobile wallet you will go for, it makes sense to get an overview of what types of mobile wallets exist.
OEM wallets or XPay wallets are the most common wallet implementations. They are associated with or tied to a certain device manufacturer, the most prolific being Apple (Apple Pay), Google (Google Pay), Samsung (Samsung Pay), and Huawei (Huawei Pay). Certain wearable manufacturers such as Garmin and Fitbit also have a proprietary mobile wallet on their smartwatches.
Here is what you should know when it comes to the differences (as of March 2023) between the four major OEM mobile wallets:
|
|
Apple Pay |
Google Pay |
Samsung Pay |
Huawei Pay |
|
Compatible devices |
Current Apple phones, watches, tablets and MacBooks |
Current Android smartphones |
Current Samsung smartphones and watches |
Current Huawei smartphones |
|
Availability |
||||
|
Authentication |
FaceID or fingerprint |
Fingerprint, PIN, password, Face ID, or pattern |
Fingerprint, PIN, or iris |
Fingerprint, Face ID, or passcode |
|
Supported cards |
Credit, debit, and loyalty, and gift cards |
Credit, debit, loyalty, and gift cards |
Credit, debit, loyalty, and gift cards |
Credit, debit, and, transportation, and loyalty cards |
|
Where can you pay? |
NFC terminals, in-app purchases, and web purchases in Safari |
NFC terminals, in-app, and web purchases |
NFC, magnetic stripe, or EMV terminals, in-app purchases |
NFC terminals, in-app purchases |
There exist many more differentiating nuances for the cardholder. For example, Google Pay might be easier to use while Apple Pay has more features and does not track any transactions. Practically, however, since the proprietary wallets tend to be tied to a mobile operating system, the choice of wallet is predefined by the device the cardholder owns.
As a card issuer, your choice of mobile wallet implementation will primarily come down to which solution is available in your country.
If multiple wallets are available, implementing them all will let you offer mobile payments to more customers.
If you want to get started with just one OEM wallet, it makes sense to pick the most popular wallet in your market. For example, in a country where most people are using Android-based phones, picking Google Pay (if available) would be a smart choice.
OEM wallets allow users to add cards from multiple banks to the wallet application. OEM wallet come pre-installed on the cardholder’s device, making it easier for the cardholder to use the issuer’s card for mobile payments.
An issuer-branded wallet is a custom-made mobile payment application (MPAs) to be used by one specific issuer. It adds to the functionality of, e.g., an existing banking app. Unlike OEM wallets, cards can be issued, stored, activated, and sent to the mobile wallet within the same application. As with OEM wallets, users can choose the mode of authentication and use their cards for contactless payments.
You can design an Issuer-branded wallet to reflect your company’s look and feel to guarantee consistent branding throughout your application. The MPA can be combined with the issuer’s existing application(s) or provide a separate payment app only for mobile payments. Compared to the OEM Pays, this supplies a more flexible user experience, design, and user interaction.
The two options supply different opportunities to issuers. OEM Pay can give the user a more seamless experience, as all cards are in one application. Issuer Pay can bring more flexibility and possibilities to the user, especially in terms of value-added services and interaction with the users.
The following table highlights some of the key features and differences between OEM Pay and Issuer Pay.
|
OEM Pay |
Issuer Pay |
|
|
Branding options |
X |
V |
|
Customizability |
X |
V |
|
Extendibility |
X |
V |
|
Cost |
$$ |
$ |
|
Implementation effort |
+ |
++ |
|
Security |
+++ |
+++ |
Branding options are particularly good for Issuer Pay as the issuer controls the mobile application and the user experience. In OEM Pay, the issuer has limited branding possibilities through card art and other available interfaces.
With Issuer Pay, the issuers can stay flexible with a highly customizable solution. This allows for a simplified user experience and onboarding, the possibility to add other services to existing applications, and the choice of which technology to use.
The cost question is a bit more nuanced. On the one hand, while there exist turnkey SDKs for issuer pay, the integration with the banking app requires careful planning, time, and effort to get the user experience exactly right. OEM Pay, by contrast, only requires you to make your cards available to be added to the wallet.
On the other hand, opening a project with, e.g., Apple has a high fixed price tag in addition to Apple’s cut for each transaction.
In terms of risk and opportunity, OEM Pay lets you for little effort be one of potentially many cards your customer might be using in a very user-friendly package. If you want customers to use your card exclusively, Issuer Pay is the way to go. For that to succeed, though, the user experience and additional features of your banking app must exceed the value that comes with the versatility and ease of use of an OEM wallet.
It might make sense to offer both issuer and OEM Pay in certain situations.
Let us assume a country where Apple Pay is available, but not Google Pay. Adopting both wallets would allow you to cover the entire mobile wallet market. The expense might be worth the cost if you are looking for a competitive advantage or leadership in the mobile wallet space.
Because OEM wallets are proprietary to the OEM’s devices, this opportunity becomes more attractive the more evenly split the market penetration is between the different devices.
Now that we have covered the criteria by which you pick your mobile wallet, we are ready to look at the requirements, functionalities, and detailed features of the two wallet types in the next installment.
Check out our guide to know more about mobile wallets.
The choice between OEM Pay and Issuer Pay depends on the issuer's priorities and target market. Both options offer value, but require careful consideration of factors like branding, user experience and development effort.