Mobile wallets (a.k.a. mobile payment apps) arrived with the release of Apple Pay in 2014. Since then, a slew of competitors have introduced their own mobile wallet function. In the last few years, the industry has seen the release of Samsung Pay, Chase Pay, Google Pay, and more.
And yet, despite the ongoing shift in consumer preferences toward digital and contactless payment methods, in-store mobile wallet use continues to lag behind expectations. In 2020 so far, it has accounted for just 5.1% of eligible transactions. So, is there an opportunity for mobile wallets — particularly in this phase of ‘new normal’ we are now entering? And, if so, where?
A Quick Recap on Mobile Wallets
Mobile wallets are, essentially, virtual wallets that store payment card information on a mobile device. Customers only need to enter their payment information in their mobile wallet once before they’re able to use this digital option at a retailer. That stored payment information is then also accessible for online payments – i.e., on a website or a payment portal.
To make a purchase at a retailer with a mobile wallet, customers simply need to hold their phone close to the point-of-sale (POS) terminal, which reads the payment information and processes the transaction. For online payment providers that have enabled this innovative option, customers select Apple Pay or Google Pay to complete their payment.
While mobile wallets make payments easier, in-store adoption of the technology has been slow. The Apple Pay mobile wallet, for example, is available on just over 90% of iPhones in the US, which represents 36% of all smartphone users. And 65% of retail sales made in 2020 to date were made at merchants that accept Apple Pay. This represents a market potential of $2.3 trillion – and yet sales from Apple Pay purchases are expected to reach roughly only $53 billion this year.
Mobile Wallets + Online Payments
When it comes to online payments, there is a much bigger opportunity for mobile wallets. Among consumer who are already making online purchases, almost 40% say they believe mobile payment apps are more efficient than other payment methods.
What does this mean for billing organizations? It means providing a truly digital-first experience for your customers means meeting them where they are. If your consumers are already storing their payment data with Google Pay or Apple Pay, the next logical step is to enable them to pay bills using these methods.
One key area where most organizations struggle is offering omni-channel payment options. Omni-channel refers to the ability to tie customer experience touchpoints together across multiple channels, such as online, on a mobile device, or over the phone. The key factor that differentiates omni-channel is the ability to maintain context from one channel to the next. This means making sure no loss of information occurs when a customer switches between channels.
Think of the last time you had an experience where you had to repeat yourself or enter the same information more than once to complete a task. Now consider how frustrating a process like that would be for one of your customers who is trying to pay a bill. To make the customer experience as simple and convenient as possible, there needs to be a shared connection between every payment channel. This extends to the payment information itself. If your customer already has payment information stored with a mobile wallet app, think of how easy it is for them to pay a bill that way.
The adoption of mobile wallet payments for in-store applications has been slow in the US. That said, among customers who prefer digital payment methods for paying their bills, there is great opportunity to enable payment through mobile wallets, where customer payment data is already stored. Simplifying the payment process for your customers is the easiest way to drive benefits for your organization, like accelerated collections and reduced manual workloads.