Mobile wallets are reaching critical mass as the alternative payment methods of Apple, Android, and Samsung Pay expand globally. For retailers, these present opportunities and challenges as the following article describes.
With Apple Pay expanding its services into Asia, and Samsung Pay recently launching in several markets across the region, mobile wallets are about to reach a tipping point.
Globally, Apple Pay is now bringing in one million new users per week and transaction volumes are five times higher than at this point one year ago. Android Pay and Samsung Pay’s entry into the market will also mean that the number of customers equipped with the capability of making mobile payments is going to skyrocket. Merchants are catching on to this trend, with both Apple Pay and Android Pay claiming a million merchants globally, and counting.
Clearly, there is no magic bullet approach to mobile wallets, and different business models require different solutions. A good way to evaluate different methods is to pilot them in a limited number of stores first, measuring KPIs such as robustness, user-friendliness, and rate of adoption.
Shoppers today expect a consistent experience across all sales channels, and the mobile phone often serves as the bridge between two worlds. For example a shopper may use his/her phone in-store to browse additional styles, compare items or read customer reviews; alternatively, the customer might order the item on her phone while on the move, and then collect it in-store.
The mobile wallet technology is here and the market is ready. It is now up to retailers to capitalize on the opportunity. Importantly, retailers must ensure that their payments partners are capable of supporting these latest payment innovations, and whatever comes next.
No doubt mobile wallets are a ubiquitous feature across the smartphone universe. The major smartphone platforms continue to report increased users, and credit card networks and issuers are striving to land at the top of the mobile wallet. But remember to consider mobile wallet capability compared to actual usage for transactions. The utilization of mobile wallets at POS has been underwhelming according to various reports. The simple answer is that most consumers are still highly entrenched in using plastic at the checkout. Additionally, merchants do not appear to be encouraging mobile wallet usage. So don’t yet expect a rapid payments conversion to mobile wallets—this is a marathon, not a sprint.
Overview by Raymond Pucci, Associate Director, Research Services at Mercator Advisory Group
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