Our friends at JEGI are providing our members with interesting insights to a “Winning Combination for Creating a Better Customer Experience and More Profits for Merchants”
Five years after Google Wallet was introduced to the US market with much fanfare, but was accepted in only a handful of coffee shops in Silicon Valley. The vast majority of retailers showed little interest in accepting mobile wallets, since they required the adoption of expensive new payment devices. Similarly, most American consumers could not understand what the excitement was all about with using a phone to pay for a purchase.
JEGI writes that the pendulum began to swing, however, as credit cards issuers established a goal of October 2015 for business to adopt EMV (Europay, MasterCard, Visa) payment technologies in the States (as has been the practice in Europe for years) to help reduce fraudulent card transactions. The rollout of EMV technologies provided a critical impetus for retailers to install card readers that enabled card acceptance by both EMV and Near-Field Communication (NFC) technologies, with the latter being significant for the widespread adoption of mobile wallets by retailers. (For those not familiar with NFC, it is the technology that allows contactless payments, such as tapping to pay with one’s Apple Watch or iPhone at retailers.)
JEGI sees heavy adoption ahead:
For instance consumers are warming up to mobile payments for a variety of reasons, ranging from convenience, to security, to the promise of better loyalty programs and discounts. A recent study found that 39% of all US mobile users made a mobile payment in 2015, which is up from 14% in 2014.
Strong Effectiveness of Mobile Apps: Mobile wallets allow merchants to better identify and understand their customers across the physical and digital worlds.
Increasing Use of Mobile for eCommerce: As we look ahead to the official start of the Christmas shopping season, it is worth noting the studies from last year on the impact of mobile (both mobile browsers and mobile apps) on online purchases.
Enhancing the Customer mCommerce Experience: With customers showing an increasing preference for doing more of their online shopping on their mobile devices, merchants are rushing to adopt solutions to improve the mCommerce experience for consumers.
Mobile Gives Rise to Next Generation Loyalty Programs: The combination of mobile wallets and apps is allowing a broader group of merchants to develop more comprehensive loyalty programs to better engage customers, replacing the need for physical wallets stuffed with reward cards which are easily lost or forgotten.
The Mobile Payments Road Ahead…
The JEGI team is excited by the emergence of an interdependent mobile commerce ecosystem. Relying on mobile apps and mobile wallets to better engage with customers and drive profits, merchants are leveraging back-end platforms and tools tied into payments infrastructure, digital loyalty solutions and mCommerce enablement.
To read the full JEGI report click on this link: JEGI_2016_November_Mobile_Apps_Digital_Payments
BIIA members will also be excited by this development because mobile payments are directly linked to an identity (devices and their owners) as well as credibility. For our industry identity services it will be ‘the new money’.