LifeLock Acquires Lemon Mobile Wallet

by Adam on December 16, 2013

LifeLock announced a few days ago that they had completed the acquisition of Lemon, Inc, a mobile wallet innovation company, for just under $50MM in cash, and an amount of unvested equity that’s commiserate with deals of this type (whatever that means). You can read more about news of the acquisition here:

http://finance.yahoo.com/news/leading-identity-theft-protection-company-120000660.html

While it isn’t specifically food-related, the acquisition does highlight the growing interest in the mobile wallet and payments space, which will have implications for businesses inside and outside the food space. I personally am somewhat bearish on the prospects for mobile wallets and payment systems outside of very specific settings (for instance, in restaurants the use case for a mobile POS system could actually work quite well). The hesitation is based on a few factors:

  • Our current physical system works quite well. So well, in fact, that it feels as those mobile wallets are a solution in search of a problem. Cash and credit cards are ubiquitous, portable, and current payment infrastructure is centered around a cash/credit card world.
  • Proponents mention security as a key feature, but mobile applications for credit card processing are still susceptible to to theft, both physical and digital in the form of hacking.
  • Mobile payment processing requires a world that is constantly connected online, when in many parts of the country and the world that is not the case. Cash and credit cards need no connectivity to work.
  • There’s a large chicken and egg gap that needs to be filled, as consumers are unlikely to adopt new technology without retailers who use it, and retailers are hesitant to change their POS ways if there isn’t a critical mass of consumers.

Square was one of the newest entrants into the mobile payment space, with their facial recognition for in-store payment, but they’ve recently abandoned those efforts in favor of new initiatives. This is telling, especially because Square has built a large amount of infrastructure around a new age of in-store POS. Even with their own payment systems they couldn’t get consumers and retailers onboard with a mobile wallet system. With that in mind, it’s hard to imagine that a mobile wallet provider that isn’t tied to a specific POS system can actually work, and in some ways, it doesn’t need to, at least not as long as physical forms of payment are still available.

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