Succeeding in the Mobile Wallet Game

Tuesday, August 25, 2015

The march is on to mobile wallet acceptance. More than just a novel, convenient way for customers to pay, it has the potential to be a serious engagement tool for merchants to grow their businesses.

According to a recent report by Deloitte, there are major benefits to mobile wallet acceptance: Higher speed of contactless transactions relative to other payment means; the ability to attract consumers with higher disposable incomes; and the opportunity to provide more personalized experiences by integrating loyalty programs.

The U.S. may be at just the tipping point of mobile payment acceptance. But as far as disruptive technologies go, this one’s likely to stick around. Gartner, Inc. has forecasted a mobile payments market worth $721 billion with more than 450 million users by 2017.

That’s not to say that the average consumer is going to ditch his or her physical wallet anytime soon. Likely, mobile payments will co-exist with other forms of payment for the near future. So why is now the time to seize on this technology?

The Changing Face of Payments

Remember the good old days of paying with cash? Or checks? If you’re a millennial, probably not. It’s no surprise that cash is losing its payment status as king.

According to a 2012 study by the Federal Reserve, many people carry less than $20 in cash. By 2017, experts predict cash will account for just 23 percent of all transactions. When “walking-around money” starts to dwindle, multiple ways of acceptance are not only necessary, but they’re potentially a way to get your customers to spend more.

By 2016, Statista reports there will be 196 smartphone users in the U.S. So while they may not be carrying much cash in their pockets, they are carrying their phones. As of early 2014, about 16 percent of mobile phone users had made a mobile payment. But if you look back over the past five years, mobile transactions have grown by 118 percent on average, according to Business Insider. It’s slowly picking up speed.

The outlook: The mobile wallet is going to make payments more convenient for your customers.

Beyond that convenience factor, how can you make the mobile wallet work for you while also providing an enhanced experience for your customers?

Customer Engagement

According to Forrester Research, having access to loyalty program points and rewards within a mobile wallet is the number one feature that interests consumers.

A March 2014 report from the Federal Reserve Board’s Division of Consumer and Community Affairs found a significant number of mobile users who reported an interest in using their Internet-enabled devices to receive deals and discounts, suggesting that “tying these services to a mobile payment service would increase the attractiveness of mobile phones as a means of payment.”

This opens up a world of possibilities for merchants. If you have a loyalty program in place, you can transition it to fit the mobile wallet model. For those who haven’t created a loyalty strategy, this could be a great opportunity to not only build one, but make it available on a fast-emerging technology platform.

Accepting Mobile Wallet Payments

Mobile wallets are accepted through a near field communications (NFC)-enabled point-of-sale system.

If you have recently upgraded your magnetic stripe POS to accept chip cards (EMV-ready cards), your system has NFC technology and can accept mobile wallet payments.

If you are unsure if your POS is ready to accept mobile wallets, contact your POS provider.

What’s Next for Mobile Wallet Adoption?

First-generation mobile wallets tried to be a single solution for all stakeholders. The problem is a single, closed wallet can’t be all things to everyone. Banks, mobile operators, merchants and consumers all have different needs and expectations from a mobile wallet. The imposition of a do-it-all wallet app creates a cascade of unintended consequences that have led to many unsuccessful wallet deployments around the world.

Choice means any app should be a mobile wallet. The solution is to enable existing apps to become wallets and let consumers decide which one to use. Wallet implementation can be made easier and more effective by turning existing apps into wallets, eliminating many of the barriers to wallet adoption.

Navigating the mobile wallet space

Does it make sense to start accepting mobile wallets at your business right now? Will you need to invest in new terminals, and if you do, how much will it cost? Heartland can help. We can assess your current POS system, your business needs, and more to empower you to make the best decision. Visit or call 888.963.3600.