Celent Banking Newsletter, November 2012

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30 November 2012
New York, NY, USA

Analyst's Point of View

From Senior Analyst Zilvinas Bareisis

Digital Wallets: Crossing the Chasm Between Online and Offline Payments

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 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. We 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.

We are 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. Please let us know what you think.

Best wishes to all as the holidays approach!

Zilvinas Bareisis
Senior Analyst

P.S. I am presenting a webinar on my recent reports Can Card Issuers Turn Loyalty Program Costs Into Revenues? and Selecting a Merchant-Funded Rewards Platform: An In-depth Analysis of MFR Vendors on December 4. If you are interested in attending, please register at

2013 Model Bank Awards

Celent is currently accepting nominations for our Sixth Annual Model Bank Awards. To nominate an individual or firm, fill out the entry form at by December 14.

Chart of the Month

From the Celent report Global Non-Cash Payments: Trends and Forecasts

Celent Published Reports

Research in Progress

  • The Future of Bill Payment Solutions in Online Banking
  • Top Trends in Payments: A Year in Review
  • E-Invoicing Vendor Models


4 December 2012
Launching a Merchant-Funded Rewards Program

13 December 2012
State of Consumer Capture 2012: The Death of Desktop

14 December 2012
Nominations Close
Model Bank Awards

9 January 2013
China’s Second Generation Payment System

10 January 2013
The US Open: Account Opening Experiences at Top US Banks

27 February 2013
Innovation & Insight Day
Boston, MA, USA

For more information, contact or call +1.617.262.3120.