Is it the Right Time Ditch your Wallet for Mobile Payments?
Whether it is a Louis Vuitton or a classic leather piece from your latest thrift spree, a Pew research says wallets are going to be obsolete by 2020. Consumers have been on the cusp of making purchases with a tap on their smartphones rather than the traditional paper and plastic. For years we have expectantly looked towards technology to make payments more convenient and worthwhile than pulling out your wallet. Now that it is here, tech experts are skeptic about mobile payment transactions.
A Yankee Group study suggests only 16% of those who own a mobile device are using their smartphones to pay for their purchases. Two-thirds of mobile device owners are interested in doing so but have not started using the mobile payment system yet. Despite an array of mobile payment services like Google Wallet, PayPal, Isis, LevelUp, Square and Loop, there hasn’t been widespread adaptation.
What is holding back consumers?
The users of mobile payment system almost tripled from 2011 to 2012. It is expected to increase in the future but tech experts think the adaptation rate is a lot slower than expected. Part of what’s holding consumers back is the fact that there is no such hassle when it comes to pulling out your credit card and swiping it on the cash counter. Mobile payment systems do not solve any of the problems consumers have.
A much bigger factor responsible for the low adaptation rate is the lack of incentives. Market analysts think consumers need a financial reason to make this change. Loyalty, offers, coupons – these are the things a credit card can’t do. It is these things that should take a front seat when a mobile wallet is being marketed. They will increase the value of the mobile payment system and consumers will be drawn towards it.
What mobile payment systems can learn from SBUX?
Google Wallet, PayPal, Isis, LevelUp, Square and Loop can take a page out Starbucks playbook. Starbucks app allows users to pay for their daily coffee easily and quickly, refill their loyalty accounts and offer instant discounts. The app in 2013 alone generated $1 billion in the US.
So an ideal mobile payment service would track your movement and know you’re turning corner at Mango and that you have shopped here before. It will instantly send a coupon to your smartphone to entice you to go in and shop from your mobile device.
About Author: This is a guest post by Racheal Dane. She is an online content marketer at StealthMate.com.