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Could the smartphone replace the wallet?

For men and women all over the world, leaving home without one’s wallet is akin to being naked. Wallets have helped us manage a number of different things over the years, from business cards and identification to money and other payment options. But alongside wallets, smartphones have become one of those things that you just don’t leave home without. Much of this is because smartphones have become single source tools for many of life’s common tasks.

So if mobile devices are capable of simplifying common user experiences in so many powerful ways, how come they have yet to replace the wallet?

In the relatively near future, the wallet may be a thing of the past. As smartphone technology is able to replicate the secure functions of other essential assets, people will find themselves with less of a need to carry a billfold, clutch or other practical items.

As smartphones continue to move farther up in importance as a personal item, businesses will have to recognize the opportunities in front of them. Engaging customers in a mobile environment is considered one of the most effective ways to establish brand loyalty. In order to experience modern consumer relationships, enterprises will have to invest in custom software development.

Mobile payments reduce the need for cash, cards
Much like magnetic strips were a welcome alternative to carrying large amounts of physical money, contactless smartphone payments are removing the need for credit and debit cards. Services like Google Wallet and Apple Pay promise to make plastic payments a thing of the past. According to InformationWeek contributor Jonathan Camhi, the concept behind this sort of streamlining has gained significant attention thanks to the improved user experiences that services like Uber are able to offer.

“Mobile payments hold a lot of promise for both the consumer experience and merchant operations,” wrote VentureBeat contributor Puneet Mehta. “As adoption accelerates, it will be important for brands to not look at mobile payments as just an exchange of funds between a customer and a company. The ‘ability to pay’ via plastic or even phone has become a commodity, and brands need to instead consider payments as part of the overall customer journey.”

The movement toward mobile payments has been significant enough to attract the attention of state lawmakers. According to Payment​ Week contributor Steven Anderson, recently-proposed legislation in Missouri would make it so that those paying via mobile would be required to show some form of identification, like a driver’s license. But like debit and credit cards, the physical driver’s license may be on it’s way out the door, as well.

Several states pushing for mobile credentials
Smartphones are popular because they enable a significant level of convenience. They have been able to take many tasks that once required a siloed item or device and turn them into software-defined activities. This is the idea that makes it possible for the smartphone to replace the wallet.

But mobile payment only takes into account one aspect of wallet replacement. People will still have to carry around their identification, right? Not necessarily, if some states are able to make good on recent initiatives to digitize the driver’s license.

According to PC Magazine contributor Angela Moscaritolo, Delaware is currently exploring the idea of deploying a secure smartphone app for state citizens to access their driving credentials. In the event that someone needs to present identification, they will be able to pull up an app and present it to those who require it.

Similarly, Network​ World contributor Colin Neagle, Iowa is exploring a similar premise.

“Unless another state or federal program introduces a similar app sooner, Iowa’s digital driver licenses will be the first legally recognized form of identification that can live on a smartphone,” Neagle wrote. “This is an important, yet largely ignored, aspect of the ‘death of the wallet’ narrative that was resurrected with the launch of Apple Pay this October. Even those who have been using Apple Pay need to carry their IDs just to drive to the store to make these purchases.”

Contacts, business information and more
The only other thing besides ID and money that people generally carry in wallets is business cards. Social media sites like LinkedIn, however, have largely removed the need for some sort of official replacement. Keeping tabs on contacts and potential enterprise associates is simpler than ever thanks to the smartphone and increased use of online assets.

Whatever is being discussed, the death of the wallet is characterized by one major common thread: custom software development. Organizations – regardless of if they are financial in nature or part of the government – that wish to simplify a user experience must embrace mobility as a customer engagement platform.

“One of the most critical things for mobile actions is simplicity. On smaller screens, every ask from a brand must be completed in one or two taps,” Mehta stated. “Understanding consumer intolerance for hassle on mobile, retailers are working feverishly to automatically bring in all aspects of the transaction (offers, payment, loyalty)[.]”

The best way to accomplish this is to invest in custom mobile app development. The end of the wallet is likely to occur in the relatively near future. As smartphones become the only thing a person needs when they leave the house, it will be critical for businesses to engage them via custom software solutions.

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