Many corporates are still wary of mobile wallet solutions

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The Worldpay from FIS 2020 Global Payments Report has predicted that digital wallets could account for more than half of global e-commerce sales by 2023. However, it also highlights a number of regional discrepancies.

In the US, for example, mobile wallets are set to surpass credit cards as the preferred online payment method by 2021, whereas Canadians are moving towards greater use of bank transfers. Digital wallets now surpass cash at the point of sale in Asia Pacific, but cash remains dominant in Latin America.

Adam Beacroft, NatWest

Eric Tak, global head of ING’s payments centre, observes that use of mobile wallets by corporates is very limited in continental Europe “mainly because card-based payments are not used widely in the region and mobile wallets typically support card payments,” he says. “We do not expect this to change dramatically in the coming years.”

Steve Murphy, director of the commercial & enterprise payments advisory group at Mercator Advisory Group, describes demand for mobile wallets in the commercial card space globally as “tepid”, although he expects an uptick when international business travel returns to something close to pre-coronavirus levels.

In the UK, NatWest’s associate director of business banking cards, Adam Beacroft, says that in the 18 months prior to NatWest launching mobile payments as an option for businesses, more than 10% of customers had already moved to add their card to their mobile wallet.

“Our data shows that mobile wallet usage is accelerating towards becoming the preferred payment method,” he says. “Business customer mobile payments increased tenfold in the eight months between December 2019 and July 2020.”

Business customer mobile payments increased tenfold in the eight months between December 2019 and July 2020

 – Adam Beacroft, Natwest

Late last month, Bank of America expanded its corporate mobile wallet coverage to Europe, the Middle East and Africa (EMEA) and Asia Pacific, having offered the service in North America since 2018. Jennifer Petty, head of global card and comprehensive payables, global transaction services, says the bank’s objective in digitizing the commercial cardholder experience is to replicate its offering to consumers.

Jennifer Petty, Bank of America 

“The user experience is further streamlined by using a mobile wallet as there is typically no transaction limit on mobile wallet payments, whereas contactless is capped at €50 per transaction in most EMEA countries,” she adds.

Petty says the benefits of increased spend on corporate card programmes include improved cash flow through working capital extension, a more efficient expense reporting process, and easier tracking of company expenses.

However, Daniel Rath, head of the corporate customers division at Raiffeisen Bank International, suggests use of mobile wallets in the corporate world has been held back by sophisticated signature authorization structures.

“At least two people must release payments, and these are usually initiated from the company’s ERP system,” he explains. “Convenience and speed are not the main motivations for this customer group – what counts is security and governance.”


Michiel Radder, business development director in the global cash management division of BNP Paribas, agrees that mobile wallets have yet to gain traction with corporates. 

“The only exception we see is payments for travel or purchasing expenses, where the employee is uploading the card in the mobile device and settling contact-free,” he says. “For corporates, it is essential to move away from cash payments as much as possible in order to minimize fraud and to be Sarbanes-Oxley compliant.”

On the question of whether wider use of mobile wallets by corporates could speed up business-to-business transactions and therefore improve cash flow – especially in current circumstances where businesses are trying to extend cash flow for as long they can – Beacroft is non-committal, pointing out that a business may still need to wait two to three days for the cash from a transaction to clear in their account.

Lewis Sun, HSBC

Lewis Sun, regional head of product, global liquidity and cash management Asia Pacific HSBC, refers to corporates looking to work with banks to build a “seller’s wallet”, although this is still at a development stage.

“One major advantage for corporates wanting their own seller’s wallet is access to data that would flow between participants in the ecosystem, which in turn could help them build more relevant propositions,” Sun says.

He also acknowledges the need for corporate mobile wallets to address challenges around payment thresholds and stronger security, with corporates tending to have multi-layer authorization processes.

“The SME segment would likely be the early adopter,” he concludes. “For business-to-business payments, corporates would probably continue to rely on existing banking infrastructure, which is more established and geared to large- value transactions.”