As with all new payment technologies, mobile wallets will only be successful when consumers in large numbers adopt them. Thomas Niedbalski Jr., Senior Vice President, Business and Client Development at Transaction Wireless, said prominent mobile wallet aggregators have garnered only mixed results because consumers are simply not using them.
Niedbalski noted that some prominent mobile wallet initiatives of third-party providers have failed to gain traction. "I've gone into the merchants that accept those forms of payment," he said. "I've talked to the store managers. And they've told me that the consumers are just not using them."
The wallets that have been successful are standalone, retailer-specific apps, such as the Starbucks Coffee Co. virtual gift card. The reason standalone gift card apps are more successful is that users have a closer personal connection with individual brands. "When I look at my own phone, I have multiple apps for multiple retailers today," Niedbalski said. "I've got my favorite companies that I do business with. I invest in downloading their apps because I want to see their latest offerings and get their promotional messages."
The San Diego-based virtual gift card network operator, founded in 2006, initially targeted the restaurant sector, as it posed the most difficult challenges for e-gift implementations, including complexities at the POS, staff turnover and speed of service issues, according to Niedbalski. "Starting with the hardest segment first, and understanding their challenges, and then building the solutions around that, has really made our platform more robust than anything out there in the marketplace," he said.
From its base in the restaurant sector, including early adopter Applebee's International Inc., Transaction Wireless expanded into the hospitality and travel, entertainment and general retail sectors. It now supports over 150 brands for business-to-consumer and business-to-business e-gift card solutions.
As a former marketer and retailer himself, Niedbalski believes that the mobile wallet aggregator model is flawed from a merchant perspective, as it bunches retailers into one undifferentiated category. That is why Transaction Wireless is staying "wallet agnostic," Niedbalski said.
Rather than selling a mobile wallet that can be white-labeled for individual retailers, the company seeks to be the digital gifting feature for retailers' overall mobile apps. "What the brands are looking for is a robust mobile application with a wallet feature, not a wallet that has other features," Niedbalski stated. Essentially, retailers will "plug in" Transaction Wireless to their individual branded apps to drive traffic to businesses via those apps, he added.
Transaction Wireless cited data from CEB TowerGroup that said e-gifting will represent $12 billion in sales by 2015 in an overall gift card market of $138 billion. How mobile wallets fit as a storage and delivery mechanism for virtual gift cards is still to be decided. But behind the "mobile wallet wars" is a more fundamental struggle, according to Niedbalski.
"It's no secret that whoever is managing the wallet, they are the ones that win," he said. "Not necessarily the people participating. Not the merchants and not necessarily the consumer. But whoever is hosting the wallet wins.
"And what I mean by that is the one that hosts is the one that gets the data. And the owner of the data is the king of the hill at the end of the game. And so, I think that message is getting out there, and so people are starting to realize, why do I want Apple owning all of my customer data?"
Retailers cede control over cardholder data when they join an aggregator's wallet. "If you're Domino's, do you want to have your Domino's wallet where you own the data?" Niedbalski said. "You have the ability to engage with that consumer, to control that consumer experience with your marketing messages."
Smart phones may thus become virtual repositories of retailer-specific apps that have reward, loyalty and marketing features, as well as wallets that allow consumers to store, redeem and purchase digital gift cards. "That's my prediction," Niedbalski said. 
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