Digital wallets have risen in popularity among consumers in tandem with smartphone adoption. While only 2 percent of the population uses a digital wallet according to Gallup, our recent survey "How America Pays," found that 25 percent of smartphone users have an app that incorporates wallet functions. (An important distinction and promising marker for future usage.) And 68 percent of mobile payment users report that they are using the alternative payment methods more this year than last year.
However, we believe that most digital wallet players to date have been focused on the wrong objective -- speedier payment -- not an improved mechanism for consumers to shop, spend, save and engage with their favorite retailers. It's not difficult for shoppers to pull out a debit or credit card and swipe because they always carry those cards. But shoppers don't like to carry all their gift cards, loyalty cards and coupons because there are too many. Integrating those, as well as ID and an option for paper receipts, into a mobile wallet is when it will become game changing.
Based on our research, here are some critical areas digital wallets could aspire to offer:
Consolidating Payment Cards Including Gift Cards
Consumers do not want to fumble around at the POS trying to figure out if they have a branded gift card, store gift card or loyalty card, in addition to their main mode of payment, which could be a credit or debit card. For this reason the former payment tools can go unused. Having them all loaded into a digital wallet that also contains credit and debit cards could be a huge benefit to consumers. It may simplify and streamline the wallet experience so that consumers get the most out of their gift cards and loyalty programs.
Offering Savings Options Through Deals and Offers
If mobile wallets could help consumers save money, it may improve their perception of the retailer. Digital wallets could evolve to give consumers seamless access to coupons, pop-up deals, rebates and rebate submission options. This responds to consumers' insatiable appetite for deals and provides the retailer with additional ways to drive spend and garner loyalty. According to the "Where It's At: A connected Shopper Study" from our engagement solutions division, 59 percent of consumers would consider allowing retailers to know where they are in-store (via beacon technology) in exchange for exclusive values and savings.
Budgeting apps have proven to be popular but categorizing spending could be a great boon for digital wallets. Consumers continue to look for ways to budget and it is a natural evolution to add a budgeting feature to the digital wallet. Younger consumers are moving away from bank accounts and deep banking relationships and this could offer a more convenient snapshot of spending for this audience.
Capturing Paper Receipts
Digital wallets could evolve to be able to capture all the paper in a consumer's wallet, including paper receipts.
In conclusion, a physical wallet has the potential to connect all relevant payment, loyalty, coupons and deals, and mobile wallets that focus only on making credit cards or debit cards "mobile" may be missing some value. There are other things that consumers find difficult -- tracking coupons, gift cards and rewards for easy redemption, tracking loyalty programs, budgeting, categorizing spending and even saving. Our research shows that 54 percent of shoppers would likely use a mobile wallet over a traditional wallet if it were accepted everywhere, so the time is right for digital wallets to continue to evolve. Companies that offer a proven platform with these new innovations are best positioned for future growth in this category.
Sourced By: NewsEdge, crm-daily.com