Wells Fargo Joins the Mobile Wallet Race
Wells Fargo will launch its mobile wallet this summer, giving consumers using Android devices a new way to pay with their Wells Fargo debit and credit cards. The move puts the San Francisco-based bank in the thick of an expanding race of financial institutions looking to hook customers on their proprietary mobile wallets.
Wells Fargo Wallet will be part of the bank’s Android mobile banking app. Consumers with payment cards issued by Wells Fargo will be able to use the wallet in the app to make contactless purchases at NFC-enabled terminals, to check balances, to manage accounts and other tasks. The wallet also will be usable at contactless ATMs, and the bank expects more than 40 percent of its branded ATMs will be NFC-enabled by the end of this year.
More than 17 million Wells Fargo customers use its mobile banking apps. Twenty-eight percent of U.S. smartphone owners have “reported having made a mobile payment in the last 12 months and 53 percent of all smartphone owners with a bank account have used mobile banking,” Wells Fargo noted, citing U.S. Federal Reserve statistics.
But despite the participation of such nonbank players as Apple, Google and Samsung, mobile wallet use remains in its infancy. Javelin Strategy & Research estimates that one-10th of 1 percent of retail transactions involve mobile wallets, though the firm predicts that mobile payments will hit $54 billion annually by 2019. Total U.S. retail spending hit about $4.69 trillion in 2015, according to non-adjusted figures from the U.S. Commerce Department.
That’s certainly not stopping banks from claiming stakes in the mobile wallet space. Chase, for instance, expects to expand retail acceptance for its Chase Pay mobile wallet when it launches later this year, according to Kim Fitzsimmons, head of global e-commerce and large omnichannel commerce solutions for Chase Commerce Solutions, said recently at the Shoptalk conference. Earlier this year, Chase struck a deal with Starbucks to accept Chase Pay for purchases at its more than 7,500 U.S. locations. Chase had predicted a mid-2016 launch when it unveiled Chase Pay last fall and is now anticipating a fourth-quarter rollout. The delay could be related to the postponement of partner MCX’s CurrentC rollout, as Chase Pay is slated for acceptance at MCX’s more than 100,000 member retail locations and within the CurrentC app.
Capital One was the first financial institution to enter the market when it introduced the Capital One Wallet in October 2015.
The upcoming launch from Wells Fargo injects more clarity into the fledging mobile wallet industry, says Joshua Gilbert, a partner at First Annapolis Consulting. “We’ve been wondering for some time what banks in general are going to do in response to the proliferation of wallets,” he says.
Although big banks have not shied away from being part of third-party wallets, Gilbert says the Wells Fargo launch demonstrates that FIs want their mobile apps to leverage the full breadth of customer interactions, including payments.