Digital wallets have risen in popularity with consumers in tandem with smartphone adoption. According to a recent survey from Mercator Advisory Group, 53 percent of smartphone owners surveyed paid by mobile phone at checkout within the past year. However, while there is a burgeoning interest in mobile wallet technology, the mobile payment experience has been somewhat one-sided.
For some time, shoppers have been able to use mobile wallets to pay using a stored credit or debit card, or a retailer credit card. However, much else that lived in their physical wallet—gift cards, egifts, loyalty and reward cards—wasn’t yet included in their mobile wallets. As such, the mobile wallet wasn’t in a position to actually replace a physical wallet.
But that is changing. Now, some mobile wallets like Apple Pay and Samsung Pay are integrating other payment, reward and loyalty mechanisms. The consumer benefit will be tremendous. Imagine: no more carrying around the multiple gift cards you are currently waiting to redeem—they are all available with a thumb swipe in your smartphone. When you receive a rebate reward, you don’t have to add an extra card or piece of paper to your physical wallet—you can add it into your mobile wallet. Same for the numerous loyalty cards from the various retailers you frequent.
Hypothetically, a shopper who wants to make a split tender transaction using a gift card and a debit card, plus apply a loyalty card to qualify for savings or points, would have traditionally used three different cards to do so. Now, some mobile wallets are supporting integration of all three, and the same shopper would only have to access a single mobile wallet to complete the same transaction.
More inclusive mobile payments options will make the payments process less cumbersome and will delight shoppers. And it may well speed up mobile wallet adoption by enabling consumers to shop, spend, save and engage with their favorite retailers using a single payment source. This is also a benefit to retailers, who are looking to make improved digital connections with consumers in all channels.
Add to this the fact that several states are testing out digital driver’s licenses, and smartphones may nearly be ready to replace that worn, leather wallet collecting crumbs in a purse or wearing a hole in your jeans.
By Teri Llach, chief marketing office at Blackhawk Network, a leading global stored value and payments provider, which supports the program management and distribution of gift cards, telecom products, and financial services products in retail, digital and incentive channels.
1) The CustomerMonitor Survey Series is an online survey conducted by Mercator Advisory Group in June 2016. The sample size included 3,009 respondents.