© 2016 NTT DATA, Inc.

Mobile Wallets Research and AnalysisMay 2016

© 2016 NTT DATA, Inc. 2

What is a Mobile Wallet?

A mobile wallet is an “app” on a consumer’s smartphone that allows them to purchase goods or services at a minimum

of one Point of Scale merchant location

© 2016 NTT DATA, Inc. 3

100+POS transactions were

performed by participants at more than 19 different merchants

Mobile Market Study Overview

Prior to this study, only a small percentage of our participants were utilizing a mobile wallet.

75%Had never registered or used a

mobile wallet of any type.

DE | NC | FL | OH | TX | CT | GA

Testing was conducted across 7 Geographic areas

18+ Financial Institution/Financial

Product/Payment Networks were used

Issued by top 10 credit and debit issuers

90% Participants used a variety of POS enabled Apple, Andriod, or Samsung devices spanning two

Operating systems*(iOS 7+ and KitKat 4.4+)

11active participants were

involved in our study

*A Windows phone was initially also included in our study, unfortunately, none of the wallets in scope support Windows compatible wallet.

© 2016 NTT DATA, Inc. 4

*Note: Indicates only partially tested due to provider constraints

Mobile Wallet Inclusion CriteriaNTT DATA evaluated a representative sample of 30+ Mobile Payment Applications for inclusion in our study.

MOBILE SELECTION CRITERIA

Mobile Wallet Sector Category Study Scope Not POS Capable Pending Market Launch

Accepting Location Not Found

Lacked Wallet Conditions

Apple Pay Digital Provider IN        MC PayPass Card Association IN       XPay Pal app Tech Titan IN        

Level Up Tech Titan IN        VS PayWave Card Association IN       XSamsung Pay Digital Provider IN        Android Pay Digital Provider IN        Walmart Pay Merchant OUT     X  Chase Pay Financial Institution OUT   X    Current C Tech Titan IN        

Capital One Financial Institution IN*       XDunkin Donuts Merchant IN        

Starbucks Merchant IN        Burger King Merchant IN        

Target Merchant OUT   X    Payapp Wallet Tech Titan IN*     X  

Tabbedout Tech Titan IN        FreeBeePay Tech Titan OUT   X    

CorPay Tech Titan OUT X

Mobile Selection Criteria

Must be accepted at a minimum of

one merchant

Compatible with at least one smartphone device?

Must be able to complete a

point-of-scale transaction

If only one merchant, must either be:Top 50 Retailer

More than 2,500 retail locations

Support 1+ funding sources

‘in wallet’

© 2016 NTT DATA, Inc. 5

We evaluated a representative

sample of 12 Mobile

Wallets covering a variety of

sectors

Digital Providers

Financial Institutions

MerchantsTech Titans

EVALUTAION CRITERIA

User Experience Payment Capability

Device Capability

Ease of Set Up

Ease of Use

Rewards/Loyalty

Merchant Acceptance

Transaction Range

Supported Funding Types

Checkout Experience

Mobile Wallet Evaluation CriteriaDimensions and Data for scoring wallets within each category.

© 2016 NTT DATA, Inc. 6

Starbucks and Paypal lead due

to device compatibility and Use features.

Digital Provider wallets were stand outs in ease

and security in Set Up and Use.

Lower scoring wallets were impacted by poor merchant acceptance

and less intuitiveset up.

Tech Titans received high ranks for offering

merchant partners’ coupons or discounts

to incent use.

Burger King’s app was very difficult to

understand; negatively impacting it’s overall

User Experience score.

User Experience Rankings Across Provider CategoriesDevice Compatibility, Ease of Set Up, Ease of Use, Rewards/Loyalty

0

5

10

15

20

25

30

35St

arbu

cks

PayP

al

And

roid

Pay

App

le P

ay

Sam

sung

Pay

Cur

rent

C

Cap

ital O

ne

Dun

kin

Don

uts

Lev

el U

p

Tab

bed

Out

Bur

ger

Kin

g

PayA

pp

© 2016 NTT DATA, Inc. 7

Wallets scoring higher were favored across

merchant acceptance, funding, and

checkout experience.

Without the exception of

Starbucks, merchant wallets ranks were

lower due to inconsistent acceptance

across merchant locations, limited

transaction types, and low security.

Burger King ranked low due to restrictive funding

channels; PayPal or BK gift card only.

Samsung Pay fell slightly short for not

accepting on Card Network and

unidentifiable at Point of Sale as accepted form of payment, as

our testers experiences some failures.

Tech titans were competitive in checkout experience but ranked

lower for merchant acceptance, transaction

types and funding restrictions

Payment Capability Rankings Across Provider CategoriesMerchant Acceptance, Transaction Range, Funding Types, Checkout Experience

0

5

10

15

20

25A

ndro

id P

ay

App

le P

ay

PayP

al

Sam

sung

Pay

Star

buck

s

Tabb

ed O

ut

Cur

rent

C

Dun

kin

Don

uts

Cap

ital O

ne

Leve

l Up

Bur

ger

App

le P

ay

© 2016 NTT DATA, Inc. 8

Current State of Mobile Wallets

LOW HIGH

HIG

H

Consumer Experience

Mob

ile P

aym

ent C

apab

ilitie

s

LEVELUP

© 2016 NTT DATA, Inc. 9

Pros and Cons for all ProvidersC

ons

Pros

Digital Providers Merchants Tech Titans

• Direct relationship with Financial Issuer

• Wallet application on device by default

• Device security is shared with wallet

• Directly funded from existing accounts

• Rich rewards and coupons

• Pre-ordering capabilities

• Employee Knowledgeable (aware)

• Compatible with device wallets for easy access

• Device agnostic• Subscribed merchants;

better working knowledge

• Richer features/functionality offered

• Trusted security• Ties to existing

reward programs• Offers locator

services/alerts and storage/payment with some gift cards

• Limited to certain financial institutions

• Lack of rewards/loyalty redemption

• Limited to certain device types

• Subject to their technology platforms

• Limited to one merchant

• Low security • Fund restrictions (e.g.

pre-funding, increments, PayPal)

• Limited merchants and types

• Specific to Geographic locations

• Low security• Limited App support

• Limitations to credit/debit card through single FI; must be a customer

• Full capability limited to Android device only

• Multiple mobile platforms (banking vs. wallet)

Financial Institutions

Apple Pay, Samsung Pay, Andriod Pay

Starbucks, Dunkin Donuts, Burger King

PayPal, LevelUp, Tabbed Out, Current C, PayApp Capital One Pay

© 2016 NTT DATA, Inc. 10

Appendix

© 2016 NTT DATA, Inc. 11

Mobile Wallet Rankings – Merchants and FI

Wallet Provider

Overall Rank

Overall User Experience

Device Co

mpatibili

ty

Ease

Set Up

Ease of Use

Rewards /

Loyalty

Overall

Payment

Experience

Merchant

Acceptance

Transactio

n Range

Type

Funds

Supported

Checkout

Experience

Summary

48 32 9 7 11 5 16 3 2 4 7

Strong rewards tie and consistent merchant experience across all locations. Preordering, accept Apple Pay as funding channel and compatible with apple wallet for

expedited purchasing, and partner marketing. However, if not regular customer, little incentive to re-use.

37 25 9 8 7 1 12 2 1 2 7

Full functionality requires Android device & Capital One product; partially tested. Open loop, limited funding

acceptance. High marks for security, location, and notification features. Use search capability to store & pay with various

merchant gift cards.

35 23 7 5 8 3 12 3 2 3 4

Closed loop, location services, but inconsistent acceptance across merchant locations. Linked to rewards /loyalty

program, ability to send gift card. Integrates with Apple Wallet for expedited POS access. Low functionality compared to

competitor merchant wallet.

25 15 6 4 4 1 10 3 1 2 4

Closed loop with very restrictive funding options, requires PayPal account set up, Offers in store coupons, but no rewards. App not intuitive, location services supported,

however, unclear and inconsistent location acceptance. Poor employee knowledge.

© 2016 NTT DATA, Inc. 12

Mobile Wallet Rankings – Tech Titans

Wallet Provider

Overall

Rank

Overall User

Experience

Device Compatibility

Ease

Set Up

Ease of Use

Rewards / Loyalty

Overall Payme

nt Experience

Merchant

Acceptanc

e

Transactio

n Range

Type

Funds

Supported

Checkout

Experience

Summary

50 28 8 7 11 2 22 5 4 4 9

Open looped, sizeable merchant footprint, works across more transaction types. High marks for wallet security, transaction history and accepted funding. Detailed set up and requires PayPal account and prefunding. Has functions for merchant

locator, pre-ordering, and loyalty card searching, storage, and redemption. Exceptional employee knowledge where accepted.

39 25 7 5 8 5 14 4 1 2 7

Still emerging. Open loop, POS wallet only. Facilitates merchant partnerships for acceptance; lack of employee education. Restrictive funding sources; lacks trusted security. Offers

merchant partnering merchant coupons or discounts.

36 21 6 6 8 1 15 4 1 3 7

Open loop, no prefunding, specific to bars/restaurants. Limited merchant footprint; location specific. More local restaurants

versus chains. High marks for employee education and ease of use. Features include tipping, pay at the table or

after leaving, splitting the tab with others.

Level Up 32 22 8 4 8 2 10 3 1 2 4

Open loop, POS only, limited merchant footprint locator service required. Good marks for funding accepted and

device compatibility. Offers wallet lock and supports transaction history. Low marks for set up security and

monthly billing process and spend limits.

PayApp 12 10 2 5 3 0 2 0 0 2 0 Unable to complete set up and fully test due to wallet provider technical constraints

© 2016 NTT DATA, Inc. 13

Mobile Wallet Rankings – Digital Providers

Wallet Provider

Overall Rank

Overall User Experience

Device Compatibility

Ease

Set Up

Ease of Use

Rewards /

Loyalty

Overall

Payment

Experience

Merchant

Acceptanc

e

Transactio

n Range

Type

Funds

Supported

Checkout

Experience

Summary

51 28 5 10 10 3 23 5 2 4 12

Open Loop; broader device compatibility, large POS merchant footprint, across geographic locations; low In app presence. High

marks for accepted funding. Easy set up, portable from Google Wallet. Excellent set up and transacting security; with itemized transaction history. High marks for loyalty & gift card features.

NFC capability expedites POS.

49 27 6 10 9 2 22 5 2 4 11

Open Loop, limited device compatibility but more device types, app native to devices. Largest POS and In-App merchant footprint across all geographic locations. High marks for accepted funding. Excellent market presence and brand

awareness @ checkout. Top rated for set up and use security; transaction history supported. NFC capability and transaction

default settings expedite checkout @ POS and In-App. Limited reward storage, lacks rewards/ loyalty card features/functions.

ng Pay 43 26 4 11 9 2 17 4 2 2 9

Open Loop, limited device compatibility, NFC/MST capable to broaden merchant acceptance to however low brand awareness

@ POS and failures were still experienced. Easy set up and access through home screen. High ranks for security, although users reported biometric issues. Wallet app not pre-loaded on device; requires download and separate set up. Inconsistent

support of transaction history. No differential in checkout experience.

© 2016 NTT DATA, Inc. 14

Evaluation Criteria Definitions and Scoring Levels

Device Compatibility Ease of Set Up Ease of Use Rewards/Loyalty

Ability to work with multiple device providers (e.g. iPhone, Android,

Windows, Samsung) and Device Type

Easy Customer Set Up / Intuitive Interface, secures data, requires minimal

time, and entry shortcuts.

Intuitive Interface, Easy access, Locations accepted, help/tutorials and

Expedited Purchasing

Rewards accrual /redemption supports loyalty cards, and partner

loyalty/offer/marketing features/functions.

Not compatible with any major device provider Not able to set-up Not able to use. No Rewards or Loyalty

Compatible with only 1 major device provider

Difficult interface, lengthy set up, multiple apps required, limited entry

options, supports wallet lock only

Difficult to access at POS, not intuitive and no merchant locator services,

worsened purchase timing

Stores 1 Loyalty / Rewards , no link or features

Compatible with at least 1 major device and smart phone only

Difficult interface, quick set up, limited entry options, offers wallet password and wallet sends notification to ‘out of

wallet’ channel

Intuitive interface, easy access, offers location service, some in app tutorials,

purchasing inconsistently expeditedStores 1+ Loyalty / rewards Cards no

links thru wallet, no feature/function

Compatible with 1+ major device provider and 1+ POS smart phone only

Easy intuitive interface, 1+ entry shortcuts, minimal time, offers wallet

password/PIN, wallet sends notification in ‘out of wallet’ channel; requires

confirmation

Intuitive interface, easy access, no tutorial or location service, but accessible

on internet accessible, purchasing consistently expedited

Stores 1 Loyalty/Rewards, access/redeem links thru wallet

Compatible with 1+ major device provider 1+ POS smart phone and other

device type

Easy intuitive interface, 1+ entry shortcuts, minimal time, requires wallet password/PIN and ‘Issuer’ notification in

other channel , requires confirmation

Intuitive interface, easy access, support merchant location service and

help/tutorials, purchasing consistently expedited.

Stores 1 or more Loyalty/Rewards, can access/redeem links thru wallet, 1

feature/function

User Experience

© 2016 NTT DATA, Inc. 15

Evaluation Criteria Definitions and Scoring Levels

Merchant Acceptance Transaction Range Fund Types Supported Checkout Experience

Number/types of accepting merchants, consistent acceptance, identifiable as form of payment accessibility across

geographic locations

Range of Transaction Types supported in wallet

Funding options supported minus any restrictions, e.g. Issuer, Card

Association, Spend limits, Transaction fees

Calculated scoring based on expedited purchasing, employee knowledge,

identified form of payment, transaction history, and security

Not accepted at POS n/a No funding optionsLengthen purchasing, no employee knowledge, identified payment, or

transaction history

Unrecognized, limited merchants, hard to find in most geographic reasons POS Only 1 channel

(Credit only)

No change in purchasing, lacks knowledge, identified form of payment, or

transaction history

1 Merchant or Merchant type, inconsistent location acceptance, no In-App, limited access based on location

POS + 1 (e.g. In-App) 2 channels

(e.g. Credit, Debit)

No change in purchasing, lacked 2 amongst knowledge, identified form of

payment, or transaction history

1 Merchant or Merchant type, or variety, consistent location acceptance, some In-

App, location based

POS + 2(e.g. In-App, P2P)

3 channels(e.g. Credit, PayPal, gift card)

Expedited purchase, lacked 1 amongst knowledge, identified form of payment, or

transaction history

Variety of merchant types, POS and In-App, consistence acceptance, across

geographic locationPOS + 3+

4+ channels(e.g. Google Wallet, Debit, Bank

account)

Expedited purchase, knowledgeable employee, recognized form of payment,

and Transaction history

Payment Experience

© 2016 NTT DATA, Inc. 16

Full Mobile Wallet ListingMobile

Category Name Device specific

Issuer Specific

Association Specific

Transaction Range

Merchant / Location Specific

Funding Sources Terminal Type Addt'l

CostDigital Payment 1 Apple Pay Yes Yes MC, Visa, AMEX, Discover Online, POS, In App   Credit, Debit NFC  

Card Association 2 MasterCard PayPass No Yes         NFC  

Digital Payment 3 Pay Pal app No     Online, P2P, POS     Digitaldebit/credit

card has 2.9% transaction fee

Digital Payment 4 Level Up No No   P2P, POS     Digital, NFC, QR Code  

Card Association 5 Visa Pay Wave   Yes VS Online, POS?        

Digital Payment 6 Samsung Pay   Yes MC, VS, AMEX Online, POS, InApp   Debit, Credit NFC, HCE, MST  

Digital Payment 7 Android Pay Yes Yes MC, Visa, AMEX, Discover Online, POS, In App     NFC  

Merchant 8 Walmart Pay No No No POS, online Select Walmarts credit, debit, pre-paid or Walmart gift card QR Code  

Financial Institution 9 Chase Pay No Yes - Chase only   POS, online, In-App   Chase Debit/Credit QR Code  

Digital Payment 10 Current C No       Columbus, OH only      

Financial Institution 11 Capital One Yes Yes MC, VS       NFC  

Merchant 12 Dunkin Donuts No              

Merchant 13 Starbucks No No No Online, POS, P2P        

Merchant 14 Burger King                Merchant 15 Target No              

Digital Payment 16 PayApp Wallet   No No POS   Credit, Debit QR code  

Digital Payment 17 TabbedOut no no no         no

Digital Payment 18 Freebee Pay Yes No   POS Yes credit, debit, or PayPal Barcode Scan  

Digital Payment 19 Corfire - CorPay No No No    

including closed-loop/open-loop gift cards, credit, debit,

prepaid, and companion payment

cards

NFC or Non NFC  

Contact Us

NTT DATA Consulting, Inc. 704.936.1600 | ntt.data.consulting@nttdata.comwww.nttdata.com/usconsulting@NTTDConsulting | LinkedIn: /NTTDATAConsulting

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Prepared by Peter Olynick | Senior Practice LeadRetail BankingPeter.olynick@nttdata.com