Over the past few years, the mobile payments industry has not suffered from a lack of vendor enthusiasm and investment. And recently, activity has heated up considerably: Google announced the Google Wallet payment application will be preinstalled on Android phones sold by leading U.S. wireless carriers; Samsung is waiving fees for Samsung Pay service for credit card companies in some markets; and of course Apple Pay launched amidst the frenzy of the iPhone 6 launch. Clearly the biggest technology brands are betting big on mobile payments.
Transitioning mobile payments use from early adopter phase to the mainstream has been a slower trek; millennials have emerged as the heavy mobile wallet users early on (Nielsen reported in 2014 that 55 percent of mobile payments are made by smartphone users who are 18-34 years old); consumers are still not ready to cut up their credit cards yet; and business-use cases still lean heavily towards retail and restaurants. That said, the market opportunity is significant; Forrester Research projects a $142 billion mobile payments market by 2019 – and that’s just in the U.S.
While mobile payments offer enhanced payer convenience, the pace of adoption to date points to the yet-untapped opportunity to transform the value of mobile payment transactions for both customer and vendor by integrating mobile payment services with cloud storage and mobile data collection applications. To do so, there are a handful of strategies for IT vendors and businesses to consider.
Simplify mobile payment integration
The more complicated it is for businesses to integrate mobile payments with core business processes, the higher the barrier of adoption becomes – particularly for small and mid-sized businesses that often lack IT and developer resources. Vendor solutions must, in effect, provide users building apps with “drag and drop” capabilities to add payment functionality. By doing so, mobile payments can be extended beyond traditional retail and restaurant use cases to a broad range of business processes, including customer invoices, work orders, retail sales, and rental agreements.
Change how businesses can store and leverage mobile transaction data
Historically, payments innovation has stopped at the transaction level. As a result, businesses continue to distribute thousands of customer receipts that provide little value beyond the transaction itself. By linking mobile payments to transaction and customer data, informative customer information can be stored and leveraged to change the way businesses interact with customers – not just at the point-of-transaction but also through the full customer lifecycle. For example, if a consumer who purchased printer cartridges three months ago is now purchasing a different item, the receipt might include a discount or reminder to replace the cartridges.
Integrate mobile payments with data collection apps
Mobile payments and cloud storage are two of the three services that mobile operators indicate are in highest demand from businesses purchasing tablets and smartphones for their employees. The third service, which is receiving the least attention but that could prove most critical as a customer growth engine for mobile payments, is mobile data collection.
As mobile payments providers maneuver and pivot within the rapidly evolving market, a strong argument can be made that the path forward isn’t just about making it easier for mobile transactions to occur, but to integrate mobile payment capabilities with a broader range of business processes. While many consumers have, by now, used a mobile device to purchase coffee or conduct a retail transaction, few have had the opportunity to do the same when a plumber comes to the house to fix a broken water heater, or to pay for a package delivery. Tighter integration of mobile payments with data collection applications will go a long way to broadening the business user profile.
Personalize the payer experience
Emerging solutions now enable businesses to infinitely customize the customer experience prior to transaction, easily accept payment for goods and services, analyze mobile transaction data, and generate custom-branded receipts (with coupons, social media calls-to-action, website URLs, etc.). Bottom line: the more that businesses can leverage data collected via mobile payment transactions to enhance the customer experience, the greater the value both vendor and payer will see in using the technology.
An immediate example is the ability to turn the untapped brand real estate currently wasted on receipts into an opportunity to improve customer retention, increase revenues and create a stronger relationship with customers. Businesses can leverage transaction data during and after the point-of-sale to generate more robust, custom-branded digital receipts for customers that, for example, includes not just the total dollar amount invoiced, but also any data associated with what work has been done (i.e. – before or after pictures of a repair or what model number was installed, or instructions on how to care for what was installed).
Momentum is clearly in the favor of mobile payments, but in order for vendors to meet and exceed lofty growth projections for the category and consumer expectations, they must extend the value that mobile payments can deliver beyond payer convenience.
Jason Peck is director of marketing at Canvas, a leading provider of cloud-based software that enables businesses to replace expensive and inefficient paper forms and processes with customizable mobile apps for smartphones and tablets.