Inside the Mobile Wallet: How Does it Work?

By Christopher Cox, vice-president, Product Development, First Data Mobile Solutions  The number of people using mobile payments is on the rise, and this number will only grow over time as new technologies and advancements are introduced. Today’s consumers increasingly expect a shopping experience that seamlessly crosses online and offline channels. They use multiple channels and information sources to make buying decisions and expect an integrated experience that’s timely and consistent wherever they are and at any time—a concept First Data calls Universal Commerce.  In addition to providing consumers with a new way to make payments, mobile devices represent a new channel for financial institutions to communicate with their customers. The mobile connection enables financial institutions to send information such as promotional offers to their customers in ways that are more targeted and useful to the consumer. Because every active mobile device is tied to a person with unique shopping preferences, needs, and desires, customer communications can become highly personalized. This idea of connected, customized, real-time marketing presents a new opportunity and competitive challenge. At the core of this opportunity is the mobile wallet itself—a mobile phone provisioned with account information that allows its owner to use the phone as a payment device. But have you ever wondered how this functionality actually works? Here is a quick snapshot of the technologies that allow mobile phones to make payments. Trusted Service Manager:  read more at the ABA Banking Journal