Digital Wallets: Crossing the Chasm Between Online and Offline Payments

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21 November 2012
Zilvinas Bareisis
Despite increasing online-offline convergence in retailing, there is still a chasm between online and offline payments which today’s digital wallets are struggling to cross. It remains a challenge today to use secure element-based payment credentials online and cloud-based credentials at the physical POS, although various solutions to bridge the divide are emerging. The above statements form the central thesis of my new report to be published early next week under the same title as this blog post. With my report, I sought to address the following key questions:
  • Given the proliferation of solutions, how to differentiate between various digital wallets in the market today? How best to think about the solutions, economics and implications for various players?
  • Is there any consensus in the market on what is important in order to succeed? What are some of the big unknowns which could significantly influence the market? What are some of the key challenges that the industry as a whole needs to address?
  • How should financial institutions respond to these market developments?
During my research, I have been studying a number of digital wallets (or their announcements), including Google Wallet, Isis, LevelUp, O2 Wallet, PayPal, PayPass Wallet Services, QuickTap Wallet, Serve, Square Wallet, by Visa, MCX, Apple Passbook, Micosoft Wallet Hub, and FIS & Paydiant wallet, all of which are discussed in the report, along with a number of other solutions and ideas around mobile and digital payments. I am also proposing a framework how to analyse digital wallets, which should help banks and others understand the impact of wallets on the economics as well as customer and merchant relationships, availability of data, risk management and other key areas. If you are a Celent client, don't forget to visit our website ( next week to download the new report. I hope you will find it interesting, but do let me know what you think. And to our American readers, a very happy Thanksgiving!


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Asia-Pacific, EMEA, LATAM, North America