Who will win the digital wallet race? That is the central question in Aite Group's new report on the emerging battle for the digital wallet, and the bad news for the established financial services players – think MasterCard and Visa – is that their existing lines of business “shackle” them to old-school technologies. 

That is why Aite researcher Rick Oglesby argued that the smart bet is on the “more disruptive” – that is, innovative – approaches coming out of new-style players such as PayPal.

In a statement, Oglesby said, “The major card brands appear to be painted into a corner, deploying mobile payments strategies designed to protect their existing business. At the same time, they are surrounded by alternative-payments providers that have the flexibility to pursue a wide variety of solutions and allow demand to drive the results. The playing field is set for a major battle, and traditional payments powers appear to be at a disadvantage.”

Oglesby elaborated in an interview: “The players who can experiment are in a much better position to win.” 

What will prevail – the solutions that will win with consumers and merchants – are simply not yet known. Getting there, suggested Oglesby, will require a lot of trial and error. And the players who can afford to be “disruptive” seem to him to be the ones most likely to succeed.

Either way, however, Oglesby boldly predicted that after many years of talk about digital wallets, action is about to happen: “2012 will be the year of the digital wallet – it definitely is coming,” he said.