With an estimated 77% of American smartphone owners using mobile wallets in 2018, digital payment demands are high. Merchants need flexible, robust, end-to-end operations that accommodate changing consumer behaviors.
Merchants and payment service providers (PSPs) have to keep up with the constantly-shifting behaviors and expectations of connected consumers. It’s important to discover which mobile payment systems integrate best with their customers’ lifestyles. Speed, convenience, and security are especially important for consumers who complete transactions on the go.
Myriad of Mobile Wallet Options
Mobile wallets, which refer to any virtual technology that stores payment information, exist as both device and internet-based platforms.
Apps like Android/Google Pay, Apple Pay, or Samsung Pay, fall into the “device-based” platform category. This payment experience is tailored to different smartphone users and widely accepted as a secure merchant payment method.
Analyzing which smartphone models each merchant’s customers use determines the ideal device-based payment platform(s) for their connected consumers.
Brand-specific apps, like Walmart Pay, work best for connected consumers who shop consistently at the same places. Retail merchants with loyal customer bases may find in-store apps a useful tool for combining online and in-store experiences.
Internet-based mobile wallets PayPal and Venmo are flexible because of their dual website and app presence. Like the device-based digital wallets, they serve as payment methods for a variety of online and offline purchases.
These platforms also have peer-to-peer payment (P2P) options, beneficial for industries where split or shared payments are common.
Internet and device-based mobile wallets make up the foundation of frictionless digital payments. But the number of methods for integrating payments into customer experiences have grown drastically.
Mapping Mobile Impact
According to a report by research and advisory group, Gartner, the Internet of Things (IoT) will grow to 26 billion units installed by 2020. Gartner also predicts that industry product and service suppliers will generate over $300 billion in revenue in the same period of time.
Why is this relevant? Connected consumers now expect seamless, one-click interactive experiences when they shop. “With IoT becoming an integral part of our daily tech consumption, payments are also being increasingly integrated into the overall experience,” stated Chris Tyghe, Vice President of Strategic Development at Ingenico Group Canada.
Seamless IoT experiences may look like interactive payment-enabled screens in traffic-heavy areas like street corners, transportation hubs, or shopping centers. Consumers pay with mobile wallets, contactless credit cards, or smart devices, and receive receipts as a text or email.
Merchants can use near-field communication (NFC) connected screens to offer a frictionless buying experience for connected consumers. Not only are they secure and easily transportable, but they also increase conversion rates, turning a 3-5 second interaction into a complete customer transaction.
But it’s not enough to follow up-and-coming trends in interactive digital payments. Solving real-world problems is the most important focal point for any mobile payments strategy.
Mobile wallets have a variety of applications outside of emerging markets like IoT. Many current payment systems often used by consumers are in need of an upgrade. Merchants can take advantage of their in-depth knowledge of customer lifestyles and pain points by offering seamless payment processing systems that address these issues.
For example, Saarbruecken, in Germany, saw a 45% increase in revenue generated at parking lots. The city introduced mobile apps for parking tickets as an alternative to traditional coin-based ticket machines. This new approach to an old problem (locating change) appeals to consumers who live in a largely cashless society.
Focusing on current needs over future technology has the advantage of quick and enthusiastic adoption. And using service apps as a complement to traditional payment platforms can be highly impactful. But with technological innovation moving so quickly, jumping on new applications for mobile wallet usage can only benefit merchants.
Another digital out-of-home (DOOH) payment method, the in-store app, boasts a high conversion rate. According to PYMNTS recent survey on Mobile Wallet Adoption, Walmart Pay has been used at least once by nearly 25% of US adults with smartphones. This mobile wallet may be limited in scope, but the convenience of frictionless, streamlined shopping at a major retail chain is hard to duplicate.
Now more than ever, cashless, contactless payment methods are being prioritized by businesses around the world. It’s clear that the mobile wallet trend is not going away. Merchants have a variety of secure and convenient platforms to choose from in order to suit their customers’ lifestyles. By prioritizing current needs combined with emerging technology, merchants can create unique interactive experiences for connected consumers.
