The future of mobile wallets lies beyond payments
The world has become a home to 7.2 billion mobile devices, and they are multiplying 5 times faster than the people are. No other technology has ever put a global impact like the mobile phone. They have become the fastest growing human-created phenomenon ever- grown from zero to 7.2 billion users in just three decades. Gradually, the mobile users are switching to smartphones and this shift has become so swift that almost 65 percent of the new internet users experience their first internet surfing via their smartphones. Smartphones have also become the most preferred money transaction medium owing to the usage ease and convenience it offers.
Catalyst driven adoption of mobile wallets
While the rapid growth of digital payments worldwide has been driven mainly by the penetration of smartphones; other catalytic factors like improved infrastructures, personalized experiences, loyalty programs, instant rewards, discount coupons, instant transaction notifications etc. have had a significant impact on this industry.
One cannot ignore how mobile wallets have made paying a breeze. With features like camera, notifications, location-aware services, comparison shopping and virtual receipts, they have succeeded in enhancing the overall user experience. Not only they carry your details permanently to allow you make instant purchases but,with the loyalty programs, they also offer some incentive to the member customers to spend more. The members, who redeem reward points, stay engaged with the loyalty program. The redemption can be defined in the form of rebates, points, cash back, discounts or even in a combination of these.They provide greater gratification with incentivizing to those spending more.However, the digital payment market is gradually moving from loyalty programs towards instant rewards which tackle the low threshold consumers, leveraging instant gratification, create a rewarding moment with the consumers, which they will remember for a long time. Alleviating the accounting difficulties, instant rewards create a win-win-situation for both the sides.
Digital payments have witnessed a relatively higher growth curve owing to the fact that the millennials account for around 50 percent of total smartphone users globally. These individuals are attributed to be pivotal to the rise of e-commerce and are now playing a similar role for the success of the digital payments industry.
Stimulated by these factors, more than 40 percent of the money transactions started happening through mobile phones and of them, more than 52 percent transactions take place through digital payments.
Mobile wallets — more than just payment tools
Mobile wallets underwent significant changes to meet the changing needs of the industry. Initially, they started with phone recharge and then gradually they extended the array of their services to bill payments and DTH recharges. Now, this burgeoning segment has included e-commerce, coupons, cash-backs and financial services as well. Money transfers. Bill payments, mobile recharges and utility applications are some of the major areas that witnessed the highest mobile wallet utilization during 2014–2015 and since then, it has grown up by 110 per cent. What more, the mobile wallet companies are coming up with more innovative ways to drive consumer engagement and attract new customers towards a cashless form of transaction.
Presently, a majority of the population spend a lot of time on mobile applications and the new audience portals such as messaging and social media apps. The mobile wallets are anticipated to see a major transformation with the inclusion of a social, peer-to-peer dimension to its services. Social gifting is destined to become quite a popular trend driven by the tech-savvy consumer base which will evolve money transfer through mobile wallets as a socially meaningful gesture capable of earning immense goodwill. There’s a lot of scope for mobile wallets to develop as a means of easing financial transactions, proving handy on outings or aiding emergency fund transfers.
Digital money transfers are being adopted worldwide. Now, the users are sending and accepting payments, donations, tips, gifts and rewards on a dozen social media platforms as well. In the coming time, mobile wallets, in order to reach out to the consumers, will definitely require borrowing mobile moments from such platforms or it will have to itself transform into one such platform.
Future scope of mobile wallets
Based on the recent developments, it can be said that mobile wallets will become a self-reliant ubiquitous ecosystem very soon. In the coming time, value added services will take mobile wallets far beyond just payments and it is anticipated that they will develop as a new but significant marketing channel capable of merging the online and offline marketing efforts together.
Instead of replacing the merchants’ integrated apps, mobile wallets can complement them offering more reach and engagement. Thus, the marketers may be seen developing integrated mobile wallet apps alongside creating a path-breaking social experience to add value beyond payments in the coming time.
Marketers can take advantages of the emerging opportunities with mobile wallets to create a borrowed presence on the mobile devices of customers. Certainly they can benefit from mobile wallets if they merge together coupons, loyalty programs, product discovery, promotions and gift cards to create a new and powerful brand experience for the consumers’’ mobile moments.
In a nutshell, mobile wallets are certainly going beyond payments and pivoting into a path-breaking user experience.
Originally published at blog.mahindracomviva.com on March 24, 2016.