What’s happening with wallet solutions around Northern Europe?

For years, large conglomerates of telcos as well as startups, have been battling in the field around wallet solutions. It seems only logical that it’s an area that is ripe for disruption. But are wallet solutions a promised unicorn where the actors in the field are a couple of years too early, or are we going to go all NFC and pay with our phones in a couple of months?

Anna Oscarsson the CEO of the Swedish startup Kvittar, knew that she was in for a challenge when she decided to work on digitalizing receipts – making a system for retailers that could simply ship the receipt from your purchase to an inbox somewhere on the net. The problem is that there are so many players involved in the process of a purchase, from registering the purchase in the in-store counter, to paying it, to getting the receipt sent off in a blur of security and data control. There’s no solution to this yet and it’s a huge challenge for kvittar and their awesome idea and product. However as she says, “everybody is waiting for the golden moment, for wallet solutions to hit critical mass”.

Seeing wallet solutions work in a real-life business context is amazing. I was thoroughly impressed with the demo that PayPal did of its wallet solutions for retailers at LeWeb in Paris in 2012. Designing a complete consumer purchase experience by taking the people who visited their booth through a dummy-restaurant where you could try to order, communicate with the staff and pay from your table without taking your credit card out or getting off your chair.

But is it too soon? Is the world ready for it?

I was so lucky to become one of the first beta-testers of the iZettle when it launched in Denmark a couple of years back but I still haven’t seen it used in practice. I even tried to use it myself  at a local flea market selling old bits and pieces and people wouldn’t use it. They were scared that I was copying their cards, and they couldn’t get their heads around the idea that it’s actually a working payment solution that I could have with me at all times.

Another company that’s working in this field (and really close to my  heart) is Copenhagen-based Unwire. The company was born in 1999, and focused solely on mobile messaging. Today, their strengths lie in mobile ticketing and increasingly, mobile payments. Disclaimer: the reason Unwire is close to my heart is that it’s where my husband works. 

They have been working extensively on redeveloping the “wallet” as a digital object. Is a digital wallet the same as a physical wallet? Or could it be something else?  Could it be filled with digital vouchers and can it be social? Unwire has been working on something they call the “City Wallet”, a white label product that’s targeted big merchants and public transportation companies, which combinines ticketing, payments and value-added services.  They have also chosen to  market the wallet solution coming soon from the Copenhagen-based company 4T Mobile Payments (4 telcos) which looks like it’s going to be the northern European equivalent of the US-based Isis.

The worst-case scenario: Google Wallet.

One of the things that these 3 Scandinavian companies have in common is a lot of challenges – conceptual, cultural, technical and market-wise, as Unwire CEO Gregor Bieler explains:

“We know that there’s a big market opening up and we want to be the swift small company learning from the big guys’ mistakes. Latest research from Berg Insight shows that mobile wallets will have 1.6 % of all European transactions in 2017. The whole market learned from Google Wallet and seeing the digital wallet as simply a physical wallet without added value. We need to have added value, vouchers and loyalty schemes in it as well.”

All in all, there’s a surprising amount of creativity happening in the space. First-movers are working on polishing their setups, and all eyes appear to be on the lookout for the products that they will present. But it makes you wonder if it’s going to be another decade of “wallet solutions are going to be huge”, or if we’re actually going to see some companies investing heavily to implement the technology with society.