Is the mobile wallet approaching a critical tipping point – a threshold where its use is about to become as ubiquitous as the magnetic-stripe credit card?
At Points, we believe it is. What’s needed to cross the threshold, however, is a little assistance – in the form of loyalty programs embedded within mobile wallets themselves.
This topic, and some of the challenges facing the mobile wallet’s adoption was the focus of my session at the 2013 Mobile Wallet Summit in London last week, where I met with mobile wallet developers and executives from some of Europe’s leading telcos and payment companies.
My session“The Mobile Wallet Tipping Point: A Threshold Reached Through Loyalty Program Success,” looked at how mobile wallets have reached this adoption ’tipping point,’ the specifics behind what loyalty program implementation means in practice and the current adoption mobile wallet challenges as we see them, including:
- How early adopters have come on board, but yet mobile wallets still struggle to gain popular consumer acceptance.
- The enabling mechanism that will fundamentally alter how consumers think about shopping and transacting on the go and how merchants view (mobile) payments.
- Breaking down the barriers between merchants, consumers and third-party program designers.
- The union of loyalty programs with mobile wallets – utilizing the right technology and why loyalty programs make mobile wallet sense, namely for their consumer engagement opportunities, ease of use and widespread ubiquity.
What makes loyalty programs so valuable for mobile wallets – beyond ease of use and ubiquity? This isn’t the first time loyalty programs have re-invigorated an industry. This is most evident with credit cards. While their usage grew throughout the latter half of the 20th century, the practice of charging for items didn’t become widespread until the 1980s and ‘90s.
Today, three-quarters of Americans own at least one credit card while co-branded credit cards comprise 50% of all credit card spending. And thanks to loyalty program linkage, millions of consumers make credit card purchases they wouldn’t have considered a few years ago.
Considering the challenges including industry fragmentation, multiple payment methods, transaction fee frustration, consumer security fears and low adoption rates, however, it’s clear mobile wallets must rethink their approach to engagement and integration. This is where loyalty programs can be part of the engagement and adoption solution.
If you want to learn more about the mobile wallet tipping point, we’ve just released a whitepaper called “Loyalty: Moving Digital Wallets to the Mainstream.”
Want to continue the conversation? Share your thoughts about mobile wallets in the comment section below.