Mobile payments are on the rise, a fact many businesses can no longer refuse to ignore. This year alone the number of people paying via their smartphones is set to increase by 62% (a fifth of the total number of US smartphone users). And according to eMarketer, the value of proximity mobile transactions is expected to surge to $27 billion by the end of the year.
This rapid growth has been a long time in the making. Adoption was initially sluggish, with many retailers reluctant to embrace this new technology; claiming it to just be another contactless payment option.
However, we’ve now successfully seen this payment option go far beyond just payment, stretching into and benefitting numerous aspects of a retailer or brand’s business.
For many, this stretch has meant help with their marketing and an increased ability to acquire new, and retain old, customers. With mobile technology having already transformed the way retailers and brands can reach specific consumer groups, mobile payments functionality is now even more accurate and powerful than generic Facebook or Google ads.
For example, let’s talk transaction data. Using your smartphone to purchase an item means your mobile wallet is collecting detailed stock keeping unit (SKU) codes of all of the individual products you buy. While the bank will know that you spent £8.89 at a particular cafe today, a retailer-connected payment app knows that you bought a flat white, a salad and an apple. A huge difference in the ongoing campaign of “getting to know your customer”.
So this isn’t just one-upping ad-platforms, it’s one-upping the banks as well. When you think about it, these entities aren’t present at the moment of purchase, and they don’t really know what the customer is buying. At best, Facebook can see that you’re interested in a certain make of shoes or a specific coffee shop for example, but it’s ability to get even more granular is limited.
And a general interest has no real holding on eventual purchase. Just because a customer likes a certain Facebook page or searched for that brand online, doesn’t mean they’re committed to that make or model. It’s not specific enough to obtain deep level purchasing insight that could actually inform an effective marketing campaign. Once aimed at helping to drive product sales, marketing has now become one of the key influential factors on the sale itself.
Marketing powered by mobile payment eclipses traditional advertising in many ways:
Marketing insight
Learning a customer’s purchasing habits becomes a lot easier when you have detailed insight into their specific purchases. You can now measure your campaign’s efforts in the most effective way. Did your offer impact consumer A’s purchase of product B? If so, then respond accordingly.
Loyalty points
Research by Opinion Matters for Kalixa showed consumers are receptive to making more payments if offered loyalty bonuses or incentives. A mobile wallet which has integrated rewards and loyalty, for instance, will drive wallet adoption. This in turn will provide in-depth customer data as well as the securing of additional sales. Win, win.
Pre-purchase
Allowing customers to skip the queue at peak times and in busy stores is a great way to help your customer out and increase their overall loyalty to your store and brand. Being able to pre-reserve products in a mobile wallet is something we will see a lot more of in future.
Interaction
When people pay using mobile, retailers and brands can take advantage of the insight they have about these consumers and subsequently send personalised in-app messages, push notifications and emails. In effect, it turns their phone into a powerful marketing channel. Urban Airship reported that targeted push notifications are three times more effective than those which are non-targeted.
In the past, there just hasn’t been a good enough reason for people to use mobile payments on an ongoing basis. Using your phone or another kind of payment device to make a simple transaction might seem new and fun for the first few times - but it is essentially the same thing as using a contactless card and the novelty often wears off quickly.
But by thinking different about mobile payments and using them as a means of running targeted campaigns, a retailer can go from having limited customer knowledge to having a detailed customer profile based on real-time actual behaviour.
By Alain Falys, CEO and co-founder of Yoyo Wallet
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