The Final Countdown - Breakthrough of Mobile Wallets
How many of all transactions worldwide will move to digital and how quickly, is still anyone’s guess. However, we can be certain that migration towards mobile first usage scenarios in payment is happening. Beginning with Android Pay years ago, followed by Apple Pay soon and now the emerging Samsung Wallet, big players pave the way for better clients’ awareness of mobile payments.
Additionally several non-banking institutions offering payment services and many solutions entered the payment space, as well as more and more merchants, brands and loyalty programmes. While some are joining existing wallet engagements in bigger wallet initiatives (like Nectar Card embraced in the Vodafone Wallet), others are trying to build up their own payment wallet approach with integrated closed loop services (like Starbucks, Carrefour,...). Although adoption is more and more increasing, nevertheless there is still a huge unlocked potential for wallet operators, merchants and brands to further increase their perception in various aspects, especially if it comes to open ecosystems for value added services based on an aggregation layer.
It is simply a customer’s choice
Making mobile payment infrastructure available to customers is not enough. Any large merchant brand that interacts with customers regularly has an opportunity to convert loyal customers to an own payment scheme. But sadly downloading an app of each retailer a customer is buying at is out of the question for the majority of them. Whereas, a wallet that follows a consumer and retailer-centric proposition where the payment itself is embedded as part of an frictionless shopping experience that combines offers, loyalty and payment, is more interesting. If customers have to make the choice between a retailer app and a wallet it is likely that the richer functionality of a wallet will be their preference.
Merchants discover the Mobile Wallets space
A merchants interest in payments is purely commercial. But what they are ongoing looking for is a way to reach a high number of potential and loyal customers. Therefore they naturally extend their marketing activities towards not owned communication channels. Given the tight economic model of marketing businesses, merchants will need to partner with wallets in order to lower mobile marketing costs and get access to a large distributions network. In that respect, mobile wallet communication services are the completion of a targeted communication strategy as well as a guarantee to ensure communication beyond the own mobile channel.
What’s the secret of Wallet traction and usage?
Successful wallets follow a customer and retailer-centric proposition. Their payment offerings are embed into a welldefined ecosystem of customers and merchants, enabling ubiquitous use of payments.
In our understanding, such an ecosystem supports:
- Ads, vouchers, loyalty programmes and gift cards. This moves the payments ecosystem closer to a “unified commerce” ecosystem. This means using more market relevant services beyond the process of payment itself.
- Transaction processing of different payment sourcing types. This means that there are several possibilities to fund or link payment providers within a wallet.
- Customer targeting beyond a single mobile wallet application. This means that other ecosystem partners like merchants can distribute their content to the total reach of the ecosystem.
- The processing of user transaction data to offer relevant deals, offers and coupons based on customers interest.
Customers currently are looking for a set of services in mobile wallets to decide whether they stay analog with leather wallets and cards, or whether they transform their usage behaviour towards digital mobile payment wallets. The main use cases of mobile wallets besides accumulating and maintaining cash, are:
- collecting and consuming points, claiming personal incentives, receiving digital vouchers, collecting gifts, and further
- beneficial communication services. These communication services are marketing news, offers, push notifications, proximity and location based content services, store location finders, detailed shop business hours and merchants contact data, as well as dedicated announcements from the next shop for personalized exclusive offers.
Many reports and statistics from Forrester, Cap Gemini, Gartner, Mastercard,… clearly show: Consumers that are served with additional services in mobile wallets are happy to regularly use wallets to pay. The success of integrated communication services and loyalty capabilities is due to their convenience: especially in brick-and-mortar shopping situations, having all offers, loyalty cards and payment at hand, creates valuable experiences with long lasting user retention. However, the communication power is not only the main and essential driver to raise active usage, but also to increase transaction frequency and to push the regular amounts spent via mobile wallets.
The European Best-Practice for Wallet Consumer Engagement
To make the long story short: it is a simple and rather clear approach to use digital loyalty as strategic key component. Vodafone Group with the mobile-pocket HUB as enabling service shows a remarkable case. The Wallet achieved a best practice, which was honoured with several global awards in the past months. Scoring “Emerging Payments Award for the Best Loyalty Incentive Programme” and two trophies of the “Payments Award with the Engagement & Loyalty Scheme of the Year 2016” clearly sets a global benchmark. The recent success with the first place of Gizmodo’s mobile payment ranking before Apple Pay and Android Pay constitutes a remarkable conclusion, declaring that Vodafone’s Wallet is the actual leading wallet in the markets with appropriate payment functionality and complementing services beyond payments.
Be prepared for the Final Countdown of Wallet Wars
If you want to evolve your Wallet into a product that supports all aspects of value transfer in digital commerce like payments, loyalty, offers, coupons, contact us. Industry leaders recognize our mobile-pocket HUB as an enabling solution for rapid mobile wallet growth. It is up to you to join this award-winning ecosystem approach and prepare for the Final Countdown of “Wallet Wars”.