Mobile wallets have struggled in the marketplace due to privacy and security concerns, uninformed consumers, a lack of required infrastructure to execute payments and the convenience of existing payment methods. Mobile payments remain a niche form of payment with consumers generally relying on mobile phones to do other things in store, such as comparing prices or reading product reviews.
However, the mobile landscape has rapidly changed in recent years to the point that m-payments are not just for early adopters of technology. Euromonitor estimates 80% of all mobile phones sold in the US and 59% of those sold globally will be smartphones in 2014. This development means it is more feasible for merchants of all types to launch successful m-payments platforms.
Smartphones enable consumers to receive geo-location discounts, coupons, faster transactions, emailed receipts and loyalty programmes. If businesses focus on these integrated loyalty offerings or more robust loyalty platforms, they will see an increased number of consumers adopting mobile payments as a way to pay for in-store purchases.
According to Evans, “Mobile payments must be as cheap, safe and easy to use as traditional payment methods to even be considered a viable option. Merely making mobile payment infrastructure ubiquitous likely won’t be enough to entice a broad consumer base. In order to encourage wider adoption, mobile payment players will have to provide additional value, which will likely be derived from an integrated loyalty platform.”