Mobile Wallet Will Trade Data

Weve hopes to compete with Google Wallet by handling shoppers’ information differently.

Powered by Guardian.co.ukThis article titled “Mobile networks see bright future for electronic wallet” was written by Juliette Garside, for The Observer on Saturday 27th April 2013 23.06 UTC

There is a scene in the 2002 film Minority Report where Tom Cruise walks into a clothes store and a computer scans his eyes. “Hello Mr Yakamoto, welcome back to the Gap,” chirrups a sales assistant in hologram form. “How’d those assorted tank tops work out for you?”

Brands from Nokia to Bulgari collaborated in the Steven Spielberg film to paint a picture of what a shopping trip might look like in 2054. But we may not have to wait that long – science fiction could become reality later this year.

In the real world, though, individual shoppers will be identified not by iris scans, but by the portable devices in our pockets. The UK’s three largest mobile phone networks, EE, Vodafone and O2, have joined forces to turn smartphones into virtual wallets that know who we are, where we are and what we buy.

“Imagine: you are walking past Topshop and an alert pops up on your phone offering you a discount in store today,” says David Sear. The new chief executive of Weve, the company set up by the networks to manage the mobile wallet project, is giving his first interview.

You’d then walk into the store, pick out a purchase, scan the barcode, and pay by tapping your phone on an Oyster-card-style reader, rather than at the till.

“It is a bit of joy,” claims Sear. Bargain lovers would agree; others might find it intrusive. To those standing in line to pay, it could seem downright rude.

The idea is not a new one, but despite the efforts of companies ranging from Google to Barclays it has yet to gain traction with consumers. Google Wallet, launched in the US in 2011, has not made it to these shores. But Weve says 15 million mobile phone customers have already opted in to its service.

At the moment, those users receive nothing more than text messages alerting them to offers. But within months, Weve says it will have opened its database, allowing companies that buy advertising slots on web pages access to data ranging from users’ physical location to the websites they visit on their phones.

Before the end of the year, Sear hopes to have created an app capable of holding dozens of virtual loyalty cards, and to have recruited its first brand. Payment mechanisms will follow.

“My background is in disruption,” says Sear, who has made his career with payments firms that challenged the big banks. An early venture used data to help retailers spot cheques that would bounce. At online transactions firm WorldPay he helped shoppers in one country buy goods in their own currency from sellers abroad.

“I succeeded with the cheque business because we enabled people to do things at the point of sale which they couldn’t do before,” says Sear. “I have 17 loyalty cards sitting in my sock drawer because I can’t be bothered to carry them all around. I think there’s a real opportunity to create one place where you might hold competing loyalty mechanisms.”

But why should an unwieldy coalition of mobile phone firms, more used to competing than collaborating, succeed where a digital native like Google has so far come unstuck?

“People in the loyalty industry know what Google wants: their data. One of the large US supermarket chief executives said the thing he didn’t want to do was give Google his data. Whatever we do, it has to be a coalition of the willing.”

weve weve-wallet

Weve claims it will share details of every purchase with the relevant loyalty card issuer. The system will also ask mobile phone customers to opt in, rather than acting like Facebook and Google and assuming users will accept advertising in exchange for a free service.

For the networks behind Weve, this is one of the advantages of having paying customers. Facebook has to presume we want advertising because it has few other sources of revenue, but mobile phone companies can afford to be a little less pushy.

“We want consumers to have bought into the value of the service,” says Sear.

He is particularly critical of Facebook Home, a new app from the social network that takes over a smartphone’s home screen to display ads alongside news and photographs from friends. “I personally do not want to see ads popping up on my phone when the screen is locked. In Facebook’s case I don’t think they are really asking for permission; it’s just part of the deal you sign up to on that system.”

Weve will not be a consumer brand. The networks will sign up customers themselves, using a dashboard of information-sharing options. Details shared could range from the first part of a postcode to age, gender, location, web browsing history and likes or dislikes. Some will be compulsory, some optional, and the requirements will vary by network. Google has a similar dashboard, but few users are aware of its existence.

“The consumer is more powerful in this stage of our digital revolution than I think they have ever been, and they will decide whether or not something is appropriate,” says Sear.

Security is another factor. When Weve is ready to link a customer’s debit card to their phone so that they can make payments, those details will be held on the Sim card. Should the phone be lost or stolen, the data can be remotely deleted by the operator.

Memory wiping was a favourite theme of Philip K Dick, on whose writing Minority Report was based. The film was made not long after the 9/11 terrorist attacks on the World Trade Centre, and Spielberg remarked at the time: “People are willing to give away a lot of their freedoms in order to feel safe. But the question is, where do you draw the line? How much freedom are you willing to give up?”

This applies increasingly to the trade-off between free services and private information. Those signing up for Weve’s service will at least be offered the choice.

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