What are the biggest user-experience challenges facing mobile wallet products?

Assuming that you are starting in a specific territory, some of the challenges for the mobile wallet are (not UX per se, but problems that I have seen and encountered with clients who have deployed mobile wallet solutions):

• Adoption rate for the wallet itself. If there are not enough wallets in circulation, then the momentum one is expecting, just fails to build up.
• Merchant Acceptance, making it easier for merchants to accept payments on their mobile wallets.
• Loading and Off-Loading fees. If the fees are higher than comparable products then you are at a disadvantage from the word go.
• Intra-wallet transfers should be free
• One-time wallet numbers for one-time tokenized payments. Example, a Pizza Hut delivery person comes to your door, and you pay him using your mobile wallet (plain vanilla USSD channel transaction, no smart phone), then you are essentially paying into the wallet of Pizza Hut, and PH will not have any robust method of knowing who paid. So if the transaction / receipt number becomes the ID onto which you pay, then it makes distributed sales a whole lot easier.
• Complementing the mobile wallet with a scheme card (think VISA/MasterCard) - prepaid associated debit card.
• Building a loyalty and rewards program around your wallet