What exactly is a mobile wallet? A mobile wallet, also known as an e-wallet, is pretty much what its name suggests, a virtual wallet on a smartphone. A mobile wallet stores a user’s payment information on a mobile device, making it convenient for the user to make in-store purchases by simply placing their device in front of a POS or scanning a QR code with merchants accepting the e-wallet service.
Mobile wallets are a fast and convenient way of purchasing goods and services and are growing in popularity. They have been ubiquitous in China for years—with Super Apps like Alipay, WeChat Pay, and Union Pay offering this feature to over 1 billion users—and the adoption rate is on the rise in other parts of the word, especially since the pandemic forced consumers to look for contactless payment alternatives.
There is no question that mobile wallets make customers’ everyday lives easier, but what about businesses? Are there any incentives for merchants to get listed with a digital payment provider and to accept e-wallets? It turns out that one of the reasons mobile wallets are becoming so popular is their convenience targeted at merchants, particularly when it comes to security, the business-consumer relationship, and the endless opportunities it provides consumers and brands.
When a user makes a payment with his/her e-wallet, the mobile app uses near-field communication (NFC) technology, which uses radio frequency to communicate between devices. NFC uses the personal identification created by the user to communicate the payment information to the merchant’s POS. This minimizes the risks of identity theft, as apposed to credit cards that can be easily stolen. Smartphones are not as easy to steal and even if they end up in the wrong hands, the user’s payment information is harder to access because the phone is protected with a password or fingerprint check. Consumers trust mobile wallets because they know they won’t get hit by fraud, and merchants know they’re going to get paid. It’s a win-win situation for both consumers and businesses.
About the Business-Consumer Relationship
Aside from credit card information, mobile wallets allow users to store coupons, gift cards, loyalty rewards, and even tickets on their phone, which is great for business owners who don’t have to pay for the production and distribution of paper or plastic cards. It also allows them to send direct messages or special offers that appear on their customers’ smartphone screen when they’re near one for their stores. Mobile wallets allow merchants to design innovative marketing campaigns that will help them build an on-going relationship with their customers. Through this digital relationship, they will then be able to anticipate their needs, convert direct communication into regular sales, and increase customer loyalty.
About the Opportunities for Consumers and Brands
The increasing use of mobile devices and the ever-changing world of mobile payments is forcing businesses to adapt and stay on top of trends. In addition to convenience, security, and effective marketing, businesses should look at e-wallets as a feature that goes beyond mobile payments and transactions. When a mobile wallet is installed on a smartphone, it stores the user’s payment information by linking a personal identification format such as a number, QR code, or image of the owner for each e-wallet card that is stored. This mobile wallet “key” then allows users to unlock checkout pages and store points, and to access everything from concert and plane tickets to rewards and loyalty cards, and to use it as real key to a hotel room or a rented car. From a business standpoint, mobile wallets offer endless possibilities to connect with consumers, and bring the overall customer experience to the next level.
At the beginning of the pandemic consumers worldwide had no choice but to forgo traditional methods of payment out of necessity. But a year later, they have become accustomed to the convenience and added value of mobile payments and are not necessarily willing to revert to cash or credit cards.
According to eMarketer, in-store mobile payment app use will hit a milestone in 2021, reaching 101.2 million among Americans ages 14 and older. And recent study from Statista showed that more than 852.5 million people had used mobile payment transactions in China as of December 2020, thanks to Chinese mobile payment industry pioneers WeChat Pay, Alipay, and UnionPay.
These numbers are hard to ignore and with smartphones becoming increasingly accessible to everyone on the planet, it’s safe to say that mobile wallets will play a big role in the future of payments. To find out more about mobile payments and how to get signed up online quickly, please contact the OTT Pay Customer Support team at email@example.com or call us at 1-800-688-9838.