Mobile has always been about one-to-one experiences. As our primary device, it’s with us all the time, when we work, play, eat, travel and shop. Alongside our wallet it’s the one item most likely to be with us everywhere we go.
In fact, the similarity to wallets has been increasing over time. We are rapidly moving to a point in time when the mobile phone overtakes the wallet, replacing and enhancing its capabilities and characteristics. Are we past “Peak Physical Wallet”? And if so, what does that mean for the future?
As an analogy, I remember not so long ago the audacious social experiment where someone attempted to live only off of items they could order on the Internet -- no going out, no phone calls. Writing these words in 2016, I can hardly think of a less controversial premise. That the fundamental experience of shopping -- well, living in a consumer society -- has changed so much in a mere 20 or so years tells us that more changes are coming, and quickly.
If we dissect the contents of a typical wallet, you can see how far we are down this road already:
Money: It’s taken for granted that we are moving toward a primarily cashless society. While paper money and coins continue to be useful for low value or low tech transactions, cash has become one of the least convenient payment methods for both buyers and sellers. When was the last time you aborted a store purchase because they only took cash and you didn’t have enough on you (and there wasn’t a convenient or free ATM in striking distance)? In contrast, services such as Apple Pay and Android Pay, once configured and linked to a credit or debit card, are always with us, and have reached the tipping point where they can be used at most major retailers and chains, with unparalleled ease of use.
Related to money and credit cards are all the things we use to help with our transactions, often tied to vendor promotions. These might be clipped coupons, discount cards or gift cards -- if you can manage to find the one you need at the right time!
Identity: Our phones are certainly our memory vaults, where we carry our photos (and videos) of loved ones, much like the headshots kept in the wallets of yesteryear. They also increasingly carry our medical information, apps for health insurance, and so on, replacing stacks of wallet-size cards (how many people carry separate insurance cards for health, dental and vision everywhere they go?). Phones have already become the preferred means of carrying boarding passes and tickets for a variety of travel and entertainment occasions. They will soon replace transit passes in many metro areas. And as we fast-forward in time, governments are looking at how to issue purely digital driver licenses, library cards, passports, and more.
Affiliation: From club memberships to loyalty cards, our physical wallets told stories about who we interacted with, shopped with, and so on. All of these functions are being subsumed by mobile devices, whether in the form of installed applications or passes.
If we accept the premise of peak physical wallet, then the advantage lies with companies and services that can embrace the one-to-one nature of the mobile phone as it overtakes and supplants the previous contents of pockets and handbags worldwide. The common thread with all of the “old media” wallet contents above is their relative inefficiency when compared with what can be done on today’s mobile platforms.
Passes -- the technology enabled by Apple Wallet and Android Pay -- are an exciting part of this post-peak physical wallet story. Not only are they easier to load and use than apps, but they conveniently enable many of the features listed above, while enhancing aspects of attribution and security. A pass can be a loyalty card, or a discount coupon, or a boarding pass.
Picture yourself in a wallet-less world. Or better yet, picture your customers there. The customer of the future won’t put your coupons in their (physical) wallet, because they won’t have one. It’s a shift that’s likely to necessitate a change in thinking from the CMOs of the world on down to everyone involved in marketing and customer relationship management. It’s both a threat and an opportunity: the good news is, the unit economics of digital coupons can be much, much lower than printing and distributing physical ones, and early movers will reap the most advantage.
So how long will it be before we all live physical wallet-free lives? We may be closer than we think.