More than ever, people are relying on their phones. And why not? Today, it’s a proverbial digital third-arm capable of performing every transaction imaginable. Studies estimate the mobile commerce market grew from $116 billion in 2014 to $467 billion in 2019,and this is before online shopping exploded during the recent COVID-19 pandemic.
Driven by smartphone ubiquity, mobile wallets are transforming the payment landscape at a staggering pace, and shoppers now expect it wherever they choose to buy.
Mobile wallets are the new Swiss Army Knife
But why are mobile wallets so popular? It’s largely to do with who’s using it, that is, Millennials and Gen Zers. Combined, they form the biggest consumer group in history with a joint spending power that’s set to grow to $1.4 trillion this year.
Mobile wallets are more than just payment facilitators. Many have evolved into a sort of payments Swiss Army Knife, with special features including the ability to split bills with friends, browse featured merchants on their apps, pay utility bills and more.
Some even allow users to send or request funds from anyone, using just a mobile phone number. Gone are the days of having to remember your recipient’s bank account number, or dealing with clunky, outdated things like SWIFT or branch codes.
With 56% of all e-commerce transactions slated to be paid through mobile wallets by 2023, it’s more crucial than ever to deliver the user experience your customers demand now. Merchants with the right mobile wallet strategies can enjoy higher user engagement and improved sales. And with many wallets allowing you to customize the payments experience with bespoke branding, loyalty schemes and promo offers, it’s the perfect investment for the future.
Since mobile wallets are fully digitized, they also empower businesses with rich data about customer preferences and spending habits, which merchants can use to make more informed decisions in their communications and tailor special offers that jive with customer favorites.
Mobile payment solutions: A safer and more secure way to pay
Mobile wallets are more fraud-proof than regular credit cards, thanks to advanced encryption technology. This basically means instead of customers’ credit card data being transmitted in every single transaction, a random sequence of numbers is generated.
Combining this technology with tools like tokenization can safeguard the payment process even more. If the sequence ever gets stolen, it would be useless. So even if your store gets hacked, your customers’ credit or debit card numbers won’t be compromised.
The best part about mobile wallet security? They automatically meet the two-factor authentication requirement for Strong Customer Authentication (SCA) under the EU’s PSD2 legislation. This is because mobile wallets have integrated biometric authentication that analyzes fingerprint, face, iris or voice recognition, as well as behavioral patterns.
For merchants in Europe, this means that by implementing mobile wallets as a payment method, you can easily comply with SCA under PSD2.
How do you get your mobile checkout set up?
Unsurprisingly, getting your business set up to start accepting mobile payments is relatively easy and painless. Just have these tips in mind.
1. Keep your mobile payments setup simple
Don’t get bogged down with choosing which mobile wallet is best for your business from the dozens of options out there. You’re far better off talking to your payments service provider. For instance, as a global payments platform, Payvision can advise you on which mobile wallets are most popular in the different countries where you operate. Or whether a particular payment method is even used at all in a specific market.
2. Integrate mobile wallets with traditional payment methods
Just because you want to jump on the mobile wallet bandwagon to future-proof your business doesn’t mean you should neglect traditional payment methods like credit cards. Many millennials have already started linking their credit cards to their favorite mobile wallets. But of course there are still some who haven’t made that transition yet, so keep your payment methods flexible with in-store options.
3. Use your mobile wallet trend analytics
Use the insights about your mobile users’ preferences to develop better business strategies around:
- Products that are the most popular
- Rewards that drive usage and keep engagement up
- Campaigns that give you the most bang for your buck
Want to find out more about how Payvision can support your mobile payments strategy? Reach out to our Payment Experts today to find out more.
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