USA Technologies Inc (USAT)

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NOT YOUR PARENTS’ WALLETS: WHAT’S NEXT FOR MOBILE PAYMENTS

http://www.apcoforum.com/not-your-parents-wallet-whats-next-for-mobile-payments/

Laura Cochran is a project consultant at APCO Worldwide in Seattle.

Move over wallet designers, because the new wallet is the mobile wallet. American consumers are spending more and more time on their mobile phones. The mobile wallet has transformed shopping and commerce offering a new way for customers to pay for products and services in a fast and easy way.

A recent research report estimated that mobile payments will reach $720 billion a year by 2017, up $235 billion from 2013.

While a host of American startups and tech companies have been trying to cash in on the growing trend, they have faced many challenges. These include consumers not seeing the advantages of paying with their mobile phones, consumers being confused by the many choices offered in the marketplace and concern over privacy and security fueled by recent U.S. cyber-attacks against Target customers and NSA classified documents.

To overcome these hurdles, tech companies should look to the tech-savvy millennial generation. More than 74 percent of millennials, defined as those between the ages of 18 and 34, view mobile technology as a tool to make life easier. Mobile payments should be secure, intuitive, personalized and offer incentives. These elements are critical in transforming mobile payments and the use of the mobile wallet into everyday consumer behavior.

Here are the top three things we can expect to see from the mobile wallet over the next few years:

Loyalty Programs: In today’s mobile marketplace, customer loyalty programs have become the norm. They offer brands a way to say thank you to their customers while also driving sales. Starbucks and Nordstrom are among some of the top retail reward programs offering customers free products and exclusive discounts for their loyalty. To incentivize customers to use mobile wallets, companies will need to incorporate loyalty programs into their mobile payment systems.

Personalization: Mobile devices have become the most personalized type of media because they are unique to each and every customer. Recent research shows 85 percent of consumers say they’d receive benefit from being able to organize and store digitized coupons, loyalty program point balances and location offers on their mobile devices. Several companies such as Best Buy and Macy’s have implemented deals through their mobile apps offering customers exclusive mobile discounts on items that they buy often. Many of these apps also provide customers with the option to personalize their security settings to ensure their payment information is protected. The next step in the evolution of the mobile wallet is for it to become an intuitive, organizational tool that stores and delivers personalized content from different businesses to each customer.

Engagement with the online community: Whether it’s tweeting, posting to Facebook or sharing a video on Instagram, social media still reigns as the king of the mobile market. According to a Nielson report, 85 percent of U.S. smartphone users regularly use social media apps, the most of any type of app. With this in mind, the mobile wallet will need to incorporate social media to allow users to share with their followers what they’ve purchased, where they shopped and the deals they got. This will not only help brands to engage with customers and personalize their shopping experiences, but it will drive awareness of the mobile wallet through consumers advocating for it.