MSFT has a Wallet too?

Why announce at the developers summit? My guess is it has to do more with MSFT’s desire to turn on a developer community for the digital goods. MSFT is in control of the platform here, while the POS and NFC is far in the future.

23 June 2012

From the Window’s Team Blog

Wallet: Windows Phone 8’s new digital Wallet feature does two great things. It can keep debit and credit cards, coupons, boarding passes, and other important info right at your fingertips. And when paired with a secure SIM from your carrier, you can also pay for things with a tap of your phone at compatible checkout counters.

From PC Magazine

Microsoft is taking a somewhat unusual approach to a digital wallet by introducing a Wallet hub app and APIs that let third-party developers build applications to process transactions. What makes this so unusual is its use of “Secure SIM” cards.

Microsoft has some very interesting assets and experience (see Wikipedia on wallet, passport, liveID).

  1. Microsoft has 3 POS systems (see overview) with Dynamics as their “go to”.
  2. Passport “experience”
  3. Phone OS
  4. Developers (will leverage core Win 8)
  5. Cash to compete
  6. Skype
  7.  aQuantive (digital advertising)
  8. MSN Money
  9. Global sales/distribution
  10. Patents

MSFT Hurdles (Wallet focus)

  • No phone OS adoption
  • Brand
  • Consumer Demographics of Phone 8 buyer
  • No “killer” apps/capability compared to Android/IOS
  • Minimal credit cards stored w/ LiveID
  • Current phone “app” footprint
  • Handset manufacturer commitment (See HTC article)
  • Time for Nokia to support
  • How on earth are they going to Sync a card in the NFC SWP SIM with the Wallet Hub?
  • US MNO Support
  • Time to complete large scale pilot
  • Subscale digital Advertising platform

Why announce at the developers summit?  My guess is it has to do more with MSFT’s desire to turn on a developer community for the digital goods. MSFT is in control of the platform here, while the POS and NFC is far in the future. So this announcement is really aimed at competing with Apple’s Passbook in areas such as in app billing and mcommerce purchases.

I will be very impressed if MSFT can get 100k handsets active w/ Orange, and over 20k a month using NFC in a SWP SIM.

MSFT.. are you doing something unique this time? My recommendation: build a Platform team that crosses your organization. Task them to build  end-end reference architecture(s) from phone to POS from mobile advertising to redemption,  … etc. Then give it away… Take a look at what Square Register has done and reinvent the POS experience. Be original.. again.

3 thoughts on “MSFT has a Wallet too?”

  1. Tom, who will control that “secure SIM”, from access AND liability viewpoints? MSFT, handset OEM, SIM OEM (all SIMs are “secure”, btw), the issuer, some 3rd part TSM? Will that m-wallet store card details – if so, how long will it be before it gets hit with uber-virus (“developers” community is huge indeed)?

    1. The operators control the SIM, but most NFC phones in market today do not have the key in the SIM, but are of the embedded type (ex NXP is leading provider). See my blog “Who owns the SE

      The carriers are in a fight to the death on SE ownership. It is less than clear who will win this battle, particularly if consumers buy unsubsidized phones that are unlocked. Assuming there is a SWP phone the carrier will control the SIM and hence the NFC controller. The liability for the card rests with the issuer provided that the device, OS and application pass certification process with the associated network. If the device complies than the card emulation application (ex paypass, paywave, express pay, …) operates no different than a swipe or chip and pin. The issuer is in complete control of when (or if) a PIN is required for a given transaction size. Cards Emulated within NFC have card present interchange rates defined by the associated network (visa, ma, …). The issuers have no say here.

      Now this is much different for a “cloud wallet” as there is no defined certification process by which the card is transferred to the merchants. Hence it will encounter CNP rates UNLESS there is a unique agreement with the issuer and the cloud wallet service provider.

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