Mobile Wallets' Business Models: Refining Strategic Partnerships

Background and Purpose: Though Mobile Wallets have the potential to entirely substitute their physical predecessor, many Mobile Wallets narrow their operations to one particular feature. This might be because of strategic business-model design choices to position themselves strategically as intermediates between users and business partners (third parties) in more delimited markets. Thus, Mobile Wallet Applications (MWAs) often represent platforms in narrow two-sided market structures. Design/Methodology/Approach: The paper focuses on the economics of such platforms by the means of a business model analysis. It examines how business partners are integrated in four MWAs' strategies: Key Ring, FidMe, Apple Passbook and Qustomer. Results: The paper shows that MWAs strive to incorporate not only a large quantity of partners but also such with a high brand value (quality of partners) in their organization design. These partners shape their service design since none of the platforms offer products or services themselves. Hence, MWAs are dependent on the third parties' capacity and willingness to fulfill engagements and meet the customer demands. Conclusion: MWAs-though concerned with the inclusion and management of loyalty points and schemes-do not leverage the possibility to generate revenue via third parties' loyalty points. Theoretically, MWAs could reward or redeem loyalty points themselves.