Mobile payments and digital wallets represent one of the fastest growing segments in today’s market. Entrants into this space face intense competition and an extreme sense of urgency to develop and deploy a solution. Currently, consumers can select from thousands of mobile apps, all promising to simplify and enhance the shopping experience by allowing users to pay for purchases with their smartphones. Convenience is touted as the primary benefit, but with the growing number of retailers making the move to mobile, it is becoming increasingly difficult for consumers to manage and maintain multiple apps.
Despite the myriad of mobile apps available for download, consumer adoption continues to lag.
Too many merchants have narrowly focused on launching a stand-alone mobile platform that meets their business goals and objectives, rather than focusing first and foremost on the consumer experience. This past year, the competition within the mobile payments industry intensified to a new level, resulting in the launch of thousands of stand-alone mobile payments/loyalty apps. This is proving counter-productive as consumer enthusiasm for this emerging technology is quickly being replaced with frustration and disinterest. The current model leaves many consumers in a state of app overload.
The 2013 Mobile Payments Consumer Survey published by McKinsey & Company found that convenience and payment integration are the keys to consumer adoption of mobile payment apps. Consumers expect added value from their mobile apps including monetary savings, improved security, convenience, and loyalty offerings. This simply cannot be achieved through stand-alone applications.
Consumers have indicated they would be more likely to use a singular, consolidated mobile platform that is accepted at multiple merchant locations, where rewards and balances are conveniently managed in one central location, as well as where usage is rewarded instantly with valuable incentives and tailored offers.
As an industry, we are at a crossroads, and the future success of mobile loyalty and payments apps is dependent on our ability to focus on the complete consumer experience. Making the technology available to the general public does not equate to consumer adoption. Tools that were originally designed to add convenience are ultimately creating confusion on both sides of the cash register.