Digital wallet apps unfold as phone users, businesses catch on

By By Mark Davis

The Kansas City Star (MCT)

Published: Wednesday, July 24 2013 12:00 p.m. MDT

“You ought to give consumers at the app level, at the wallet level, the ability to restrict disclosure of their information for anything that is not needed to complete a credit card transaction,” Geiger said, according to a transcript.

Leawood, Kan.-based Front Flip has found a way to use the valuable shopping data made possible by smartphones without collecting shoppers’ money.

It collects information instead. Front Flip’s consumer app picks up the name, age and other identity data that helps restaurants and other retailers run loyalty marketing programs.

Diners find Front Flip’s square scan codes at each booth and table of a participating restaurant.

Scan one, and up pops a virtual scratch-off prize card on your phone. If it’s a winner, you might get a free appetizer or half off an entree for that visit.

Each scan builds a history for the customer’s visits, giving the restaurant the data to send more prices to customers’ phones to reward or encourage more visits.

It makes sense, Front Flip CEO Sean Beckner said, to establish that mobile relationship with the customer before asking for the money. Layer on payments later, he says.

That’s exactly how Rebecca Martin became a Square Wallet user.

She’d used Front Flip regularly and was ready to try Square Wallet when a co-worker told her about it about six months ago. She’s a convert now.

But there was that one time when Martin’s co-worker accidentally paid for her food. Rhett Del Campo said the guy running the register mistakenly thought Del Campo was picking up the tab for both. It could have happened with a credit card, too.

Still the incident made an unfavorable impression on a third co-worker who witnessed it.

“Seriously, that’s one of the reasons I haven’t downloaded it,” Stephanie Brimhall said of Square Wallet.

Security questions about digital wallets, including loss or theft of cellphones, typically dwarf other issues in consumer surveys about mobile payments.

Advocates for smartphone payments point out that regular wallets get lifted and lost, too. The difference is that cell phones can be locked behind a PIN, as can the digital wallets inside.

Additional security measures allow the owner to shut down a lost phone, and others to recover all the lost information relatively easily.

“I trust my phone more than my pocket, anytime,” Jennings said.



Tech-savvy Americans are pikers in the world of mobile money.

Only 1 in 5 smartphone users here have digital wallets on their phones, according to Datamonitor. Its survey found digital wallets on more than twice as many of the smartphones in South Korea.

Kenyans are tops in mobile money. Roughly two-thirds of the eastern African nation’s adults use its M-PESA system to pay with their phones, according to The Economist.

Why Kenya?

It had an expensive, inefficient and limited banking system, for one. The dominant wireless company set up M-PESA, and use spread. Kenyans pay bills, do business with one another and send money to families in rural areas through M-PESA, The Economist reported.

Contrast that with America’s smooth-working credit and debit card payments system and the hodgepodge of players pushing their own versions of digital wallets here.



—1913: The Federal Reserve System was created to regulate the flow of money and to issue Federal Reserve Notes.

—1946: The first bank-issued credit card.

—1959: The first ATM was installed in a shopping center in suburban Columbus, Ohio.

—1966: The modern general purpose credit card was born — the BankAmericard.

—Early 1980s: Home online banking services were introduced.



Money has gone mobile not only on phones but also on phone bills.

Many of us texted $10 donations in the aftermath of Moore, Okla.’s tornado or similar events and made good when our wireless bills came due.

Several companies — sporting names like Boku, Fortumo and payvia — handle mobile payments without hitting your credit or debit cards. The charge lands on your next wireless phone bill.

These direct carrier billing options often pop up, for example, when buying online games and ask you to text from your phone for confirmation.



—Lemon Wallet



—Apple Passbook

—Google Wallet

—Mastercard MasterPass

—MCX Merchant Customer Exchange


—Square Wallet

—Visa V.me


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PHOTOS (from MCT Photo Service, 202-383-6099): CPT-DIGITALWALLET