Mobile wallets should be more than just a payment mechanism

Credit: DigiConceptInc /

Amongst the general hype and disruption of new, cool technologies, the mobile wallet is quietly taking off, in a big way, according to a survey by Capital One. In fact, according to the survey, ahead of the Holiday Season, almost half of mobile wallet users plan to make a purchase with it in the run up to Christmas.

About a quarter of the 1,800 or so consumers they surveyed are currently using a mobile wallet and 68% have adopted a wallet in the last year.

Other findings from the survey include:

  • Nearly half of mobile wallet users indicate they use their mobile wallets at retail stores
  • More than 41% of mobile wallet users have used this technology at grocery stores
  • 8% have paid for fast food with a mobile wallet
  • Slightly more than a quarter have used their mobile wallets at drug stores (25.7%) or for travel related purchases (26.6%).

And, importantly, more than 65% said that they would use their wallets more if more merchants embraced the technology.

While it is tempting, and simplistic, to regard mobile wallets as simply a payment mechanism, the potential is far greater. Of course, payments need to be simple and quick – and the debate of a couple of years ago about whether a card transaction was a second or two slower than a mobile payment is, and was, irrelevant.

The successful brands in the mobile wallet arena are the “order ahead” brigade, such as Taco Bell and McDonalds. The reason is loyalty, and the initial mechanism is offers.

And, while the Capital One survey gives us encouraging news, the fact is that on the busiest day of the year for retailers, Black Friday, 90% of in-store transactions took place with good old-fashioned credit and debit cards.

The potential, at the moment, seems to be in-app payments rather than the physical world.

The overall slightly depressing state of play seems to point to the lack of added value in the simple payment process. Obviously McDonalds, Wal-Mart and Taco Bell have the edge here because they have the customer base to sign up and therefore have their permission to promote to with loyalty-based offers.

When it comes to random interactions, retailers do not know who the customer is on the other side of the till, so the only relationship is the payments one.

Stores are, of course, trying to solve this by asking every customer whether they want to be on their mailing list for special offers. And the default answer is “no”.

We are too familiar with spam and we are quite capable of doing our own browsing for offers.

Many in the industry believe that location based offers will be the answer, but they will have to be careful. If customers walk into a mall and are instantly bombarded with dozens of offers, it will drive customers back out again.

The answer to this, and other areas where privacy and choice will battle it out, is for the customer to be in charge. If a customer is heading to the mall, then he should be able to ‘announce’ that he is open to offer on shoes, or food, or everything. That way, he will get offers that he will welcome, and avoid being bombarded with what amounts to spam.

The mobile wallet could play a major role in this reversal of control, but care is needed.

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