4T's speed of execution is notable; the venture was only formed in October 2011, reflecting the sense of urgency to launch services and gain traction that pervades the mobile payments business.

Salient features of the WyWallet service are its inbuilt cross-operator interoperability and wide addressable market, as the operators involved control over 97 per cent of mobile subscriptions in Sweden. IHS Screen Digest estimates that Telia, Tele2, Telenor, and 3 had nearly 11.8m mobile subscriptions in Sweden with the potential to engage with the service by the first half of 2012.

The ability to execute purchase-on-invoice payments is a novel addition to the services traditionally offered by mobile wallets in Western countries. A very popular payment mechanism in Germany and the Nordics, purchase-on-invoice payments facilitate card-not-present (CNP) transactions such as online commerce, since customers can inspect purchases upon receipt and pay for them later, in this case through their mobile phone bill.

Nevertheless, WyWallet is ultimately reliant on the existing card payments infrastructure, a characteristic that may impair its widespread adoption. This is because the friction associated with the constant need to replenish the stored value account is a common predicament of stored value accounts, and one of the reasons why they primarily work well for use-cases in which users have few other practical options, such as pre-pay public transport cards. This difficulty can only be offset by compelling users to set up automatic top-up of the account by associating their card details, as WyWallet does. It is questionable whether users will be persuaded that WyWallet provides a more seamless payment experience at the till than that already provided by plastic cards, which in turn may relegate the use of the service to CNP transactions and sporadic P2P payments.

IHS Screen Digest expects WyWallet to face strong competition from two additional sources. The first one, iZettle, is a Swedish start-up that enables iPhone and iPad users to process card payments on their devices. Founded in 2010, the company operates in Sweden, Norway, Denmark, Finland, and has begun a trial in the UK after closing a €25m Series B round of funding in June 2012. iZettle claims over 50,000 users across the Nordic countries, and has found a niche among small businesses who had until then found it too onerous to process card payments with the usual POS readers.

Competition will also come from Swish, a mobile person-to-person (P2P) payments application expected to launch in autumn 2012. The service is being developed by a consortium of Sweden's largest retail banks Danske Bank (Sweden), Handelsbanken, Länsförsäkringar, Nordea, SEB, and Swedbank. Swish allows users to make bank transfers directly from their mobile phone in near real-time, obviating altogether the need for plastic cards. This feature may draw customers in need of a fast P2P payments solution to this service since bank transfers are a reliable and widely accepted payments solution in Western Europe.