Why mWallets Are More Popular With Consumers?
Cash is going the way of videotapes. Physical wallets, made of leather or fabric, are also sliding out of relevance and into history. Wallets are becoming less practical, more like fashion accessories, as consumers turn to mWallets.
Mobile or electronic wallets (mWallets) are increasingly popular in the UK, Europe and America. Younger consumers, especially Millennials, who are less inclined to carry cash, are finding it easier to use mWallets. There are numerous players in this market.
Tech giants, including Apple, Google and Samsung, are only the latest wave of entrants to this competitive space. There have also been numerous unsuccessful pilots, with challenger and mainstream banks learning from these to implement strategies that are more closely aligned with consumer needs and preferences.
What Consumers Want – mWallets
Research from Urban Airship published in The Paypers found that “54% of US and UK consumers have now used a mobile wallet, with 30% of respondents using them in the past week.” Loyalty schemes and coupons are the most popular uses for mWallets, with 60% and 53% of those surveyed using them for those reasons within weeks of the survey. Making credit card payments and paying with a gift card are also increasingly popular, according to 22% and 16% of respondents.
Consumers want convenience and a responsive service. This is nothing new. But with mWallets, brands can implement loyalty schemes directly into people’s most used and valuable tool, their smartphones. Loyalty cards are one more piece of plastic that consumers don’t want to carry.
Instead, 69% of survey respondents are “more likely to use their loyalty card if it’s on their mobile phone.” Also, if points and rewards are immediately visible, then 73% are likely to join a loyalty program. Sending coupon reminders direct to phones will result in 64% more people making use of discount codes, thereby increasing brand engagement, encouraging loyalty, increasing revenues and driving in-store traffic.
A Smart Insights study supports these findings. According to this report, “the total mWallet revenue for the payments industry is forecasted to demonstrate a CAGR [compound annual growth rate] of 50% over the 2016-2021 period, surpassing the EUR 1 billion bar by 2021.”
Urban Airship’s survey also revealed a high take up in younger consumers, particularly the Millennials. 84% of Millennials said they were more likely to use mobile payments if loyalty rewards, discounts and other promotional offers were already applied.
How This Impacts Merchants
Do you currently have loyalty schemes? Send coupons? Or have customers who are communicating or interacting with you through their smartphones? Are you looking for ways to increase engagement? If you are looking for a service orientated way to communicate with customers, mWallets could be the solution.
Consumers want a relevant, personalised and friction free experience, and this is one way to deliver it. The top reasons for not using a traditional loyalty card are forgetting to bring the physical card and forgetting the consumer is part of a scheme. Similarly paper coupons of often forgotten or left to expire unused even when a consumer is interested in an offer. So a solution that negates the need to remember to use loyalty cards or promotional discount codes, where users can see how many points, rewards or offers they have in their mobile wallet, and increases the uptake of these kinds of incentive schemes and offers.
More information about mobile payment optimising processes can be found here.