Microsoft’s New Wallet Faces Stiff Competition, But a Potential Boost from LinkedIn
Microsoft’s mobile wallet launch this week seems like small ball at first glance but could pay off as more consumers turn to smartphone payments, and the software giant moves forward with a big acquisition.
Microsoft is making its NFC-enabled Microsoft Wallet, a cloud-based payment technology, available to U.S. consumers with Lumia 950, 950 XL and 650, all of which are relatively new smartphones that run the Window 10 operating system. The wallet will work at about 1 million retailers and will support payments made via MasterCard and Visa.
“In our digital stores today, whether it’s Xbox, Office or the Windows Store, our customers enjoy the ease of signing in with a Microsoft account and having their secured payment information on hand to quickly and more safely purchase products,” the company said in a blog post. “To help make shopping a breeze, Microsoft Wallet also provides one convenient place to store reward and membership numbers, so all customers have to do is reference or scan them right from their phones.”
That said, Microsoft has a diminishing place in the smartphone landscape, with Windows phones accounting for only 0.7 percent of global market share in the first quarter of 2016, compared with 2.5 percent from the same period a year earlier, according to Gartner. The peak for Windows-based smartphones came in the first quarter of 2013, when they accounted for 5.6 percent of the U.S. smartphone market, according to figures from Kantar.
But Microsoft clearly hopes its Wallet will prove lucrative in a market already being fought over by the likes of Samsung, Chase and Apple—Samsung Pay, in fact, recently expanded in Asia, and observers expect a new Apple Pay push when Apple releases its next iPhone later this year. Chase Pay, meanwhile, is set to expand its scope in the coming months with retail launches beyond its initial Starbucks presence.
So far, the information released by Microsoft would give little reason to think its wallet would go beyond the capabilities of competitors. But analysts this week were pointing toward Microsoft’s planned acquisition of professional networking service LinkedIn as a potential mark in favor of the new wallet. The company could find a way to use the wallet to offer P2P payments and other cloud-based services to consumers via LinkedIn, said Richard Crone, CEO of payments research firm Crone Consulting LLC.