| | OCTOBER 201919CIOReviewBy Mark Horbal, CIO/CTO, SpringBIGDIGITAL WALLETS -IT'S ABOUT ECOSYSTEMSDigital Wallets and Mobile Payment systems are here to stay. What is not obvious is who will surface as the leader, although we can certainly see who some of the players are. Where there are players, there are also winners and losers, and the latter are not just in this space but also elsewhere.This is a story of a rapidly changing ecosystem that has been stable for a long time. When we look at the history of how consumers paid for things that they bought, it has been cash and personal checks for a long time, with a few exceptions. Then, there were two disruptive changes:· The first major shakeup occurred in the mid 1960s when VISA and MasterCard made their debut. Their entry into the payment ecosystem allowed greater freedom of spending and in many cases a more convenient payment method for the consumer· Second disruptionthe Digital Wallet. It charges the consumer's credit or checking account on the back-end, while confirming to the merchant that the transaction has been paid for.Well, let's talk about this for a bitis the advent of digital payments so significant? If so, why is its acceptance so slow? Why are we not seeing a deluge of interoperating mobile payment devices, systems, users and retailers?The answer is that mobile payment and digital wallets are causing a shakeup in the payment space. To best understand why their adoption is so disruptive, let's look at this phenomenon through the eyes of the major players. They include Retailers, Consumers, Banks and Credit Card Companies, E-commerce companies, Advertisers and Content Providers, POS manufacturers and Loyalty Companies.In order to succeed and gain greatest adoption, Digital Wallet providers must recognize the importance of all these players and build an ecosystem with value for each. Those providers that are able to build these ecosystems quickly will succeed. Others will fail.The potential stakeholders in the mobile payment space are analyzing this closely, right now. The two success factors are value and speed with which these platforms are built and adopted. These two factors are also related greater value will accelerate adoption. If adoption is fast, late entrants will either become irrelevant or pay with diminished market share.Let's look at the ecosystem from the individual perspectives of the players.ConsumersIt is the consumers' adoption of the mobile platforms that will ultimately make them successful! So where is the value for the consumer?· Clearly, adoption drives more adoption. Consumers will embrace Digital Wallet technologies that allow them to use their mobile device to pay in more places.CIO INSIGHTS
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