At the beginning of the year, Forrester made the call that the future of mobile wallets lies beyond payments. By adding marketing value beyond payments — such as integration of loyalty rewards, coupons and many other services, wallets will become marketing platforms complementing merchants' own integrated apps.
Consumers want a better shopping experience, not better payment systems. By adding support for rewards programs (from the likes of Walgreens or Kohl’s) and store-issued credit and debit cards, Apple will make this fall a first step in building a more integrated mobile wallet. The rebranding of Passbook to Wallet represents an explicit push by Apple toward a more comprehensive, consumer-friendly solution.
Less than a year after launching in the US, consumer adoption of Apple Pay is modest but encouraging, all the more Apple Pay has quickly become a trusted solution.
I believe adoption in the UK will be faster than in the US for a number of different reasons:
The NFC and contactless ecosystem is much more mature in the UK.
There is no consortium of retailers like MCX with ConcurC led by Walmart willing to launch a competing offering. That said, Zapp is likely to be main competing service when it launches in October with the backing of Sainsbury’s, Asda, House of Fraser, Thomas Cook, HSBC, First Direct, Nationwide, and Santander. Barclays, the one major UK bank not backing Apple Pay, just announced today they will also support Zapp at launch.
The inclusion of Transport for London as a partner is a way to raise awareness and accelerate daily usage.
Apple will benefit from a larger installed base of compatible devices (iPhone 6 and 6+) and from the awareness created by the media buzz from the US launch.
I remember the first time I attended 3GSM in Cannes: It was primarily a B2B telecoms trade show and centered on DVB-H, WiMAX, and other technology-centric acronyms. Fast-forward 11 years, and Mobile World Congress (MWC) will be the center of the business world for a couple of days (March 2 to 5). Some things don’t change: We will continue to hear too much about technology. Simply ignore the hype, especially around 5G; it will have no impact at all on your marketing strategy for the next five years!
However, the list of keynote speakers is a good indication of what MWC has become: a priority event for leaders willing to transform their businesses. The CEOs of Facebook, Renault-Nissan, SAP, MasterCard, and BBVA will be speaking, and more than 4,500 CEOs will be among the 85,000 attendees (only 25% of which are from operators). It is fascinating to see how mobile has changed the world in the past 10 years — not just in the way that we live and communicate but also in terms of disrupting every business. I strongly believe that mobile will have a bigger impact than the PC or Web revolutions. Why?
First, mobile is the fastest and most ubiquitous technology ever to spread globally. People in Asia and Africa are skipping the PC Internet and going direct to mobile phones; they’re the ultimate convergent device and often the only way to reach people in rural areas. As Andreessen Horowitz's Benedict Evans put it, mobile is “eating the world”. It has already cannibalized several markets, such as cameras, video recorders, and GPS, and is now disrupting entire industries, changing the game for payments, health, and education, especially in emerging countries. Second, mobile is the bridge to the physical world. It is not just another “subdigital” channel. This alone has a huge impact on business models. Last, mobile is a catalyst for business transformation.
Apple Pay makes up more than $2 out of $3 spent on purchases using contactless payment across the three major US card networks. I agree with my colleague Sucharita Mulpuru that this is likely a big chunk of a small pie, considering the lower maturity of the mobile contactless ecosystem in the US. It's always better to look for absolute value. In this regard, PayPal processed $46 billion in mobile payment volume in 2014, up 68% over 2013.
Should marketers care about mobile wallets? Yes. Mobile wallets are not just about mobile payments. Consumers want a better shopping experience. Offering faster or more-secure payments is not enough; wallet providers will have to solve real pain points, such as giving consumers the ability to see what’s on stored value cards at any moment in time, access loyalty points, or automatically receive digital copies of payment receipts. In particular, 57% of US online adult smartphone users are interested in having access to loyalty program points and rewards within a mobile wallet. Access to loyalty rewards from brands is the most wanted feature from consumers, and it's the one least integrated in mobile wallets today.
It’s no secret that mobile digital wallet technology is faring better in the US than in the UK; here in Boston, I use my LevelUp app at more than half of the retailers I visit (the app tells me I’ve visited one vendor 122 times!). However, only a few providers — including PayPal InStore, V.me by Visa, and Paydiant — are serving UK consumers. (Will Amazon be next?)
To understand the popularity gap for mobile digital wallet technology between the US and the UK, Forrester leveraged its Technographics® 360 research approach to get a holistic view of consumers. By analyzing data from our European Technographics Retail Survey, 2013, UK ConsumerVoices Market Research Online Community, and UK Consumer Technographics Behavioral Study, November 2013 to March 2014, we evaluated desired features, strongest barriers, and current behavior associated with mobile digital wallet usage across UK consumers.
Our data shows that security is still a major concern among UK consumers, but the features they want in a mobile digital wallet are associated with an improved customer experience: These features make the purchase process more organized and convenient for customers, while also helping them save money along the way:
Every year for the past few years, I've been revisiting our mobile trends predictions. So let’s do it again for the 2012 Mobile Trends post I put together a year ago with my colleague Julie Ask.
So many things happened in 2012 that it's difficult to sum up the year. We’ve passed three key milestones in 2012: more than 1 million apps available, more than 100 million tablets and more than 1 billion smartphones in consumers’ pockets!
Let’s take a look at some of the key trends we highlighted last year. We expected product strategists to work with other roles to:
· Develop a scalable approach to delivering mobile services. Most advanced organizations took a more strategic approach to building and spreading institutional knowledge as well as governance for the development of mobile services. However, the majority still do not coordinate their approach between marketing, IT, agencies, and vendors.
· Craft a mobile strategy that expands beyond phones. Only the most advanced players differentiated their tablet strategies. I know of a leading online retailer that is now generating 10% of its overall online sales via tablets because of the launch of an iPad app only eight months ago! However, most players still lump smartphones and tablets into the same “mobile” bucket without understanding the differences in the context of use.
Mobile digital wallets are emerging and going beyond payment. New technologies, mixing QR codes, apps, personal financial management software, NFC, and many more, are combining to convert mobile handsets into digital wallets that combine not just payments but also receipts, vouchers, and loyalty. Beyond the convenience of using the phone for payment, consumers will benefit from post-transaction elements such as location-based coupons or enhanced product information at the point of sale (POS).
We’ve not seen a single day without a new product launch, start-up creation, or acquisition — or a new strategic alliance between banks, payment networks, Internet firms, or mobile operators.
So what’s new today? Telefonica 02 just announced the launch of O2 Wallet in the UK.
We believe that the O2 Wallet is, for now, the most comprehensive mobile payment solution in the UK – available to a majority of smartphone owners, whether they are O2 customers or not. The new product combines the following functions:
Money Message — This gives customers the ability to easily transfer money to any UK mobile phone number.