Over the past few years, there has been a slow but steady shift among both consumers and merchants toward adopting mobile payment platforms and processing. However, the rate of that adoption is still a little slow for the tastes of some in the payments ecosystem, particularly developers and security experts. As a consequence, more companies are now trying to incentivize use of these platforms to ensure more users – on both ends – are brought into the fold.
For merchants interested in adopting mobile payment processing, working with a trusted payment processor can go a long way toward ensuring a successful transition.
Experts generally agree that the group most likely to adopt mobile payments are millennials, because they tend to be more tech-savvy and interested in early adoption, according to a survey by LendEDU. However, while most use some sort of mobile payment platform, the majority of them are the type that simply enables them to send money back and forth between each other, such as Venmo (used by 44 percent). Meanwhile, only 14 percent of respondents said they use their bank’s mobile app. In addition, 35 percent of respondents simply don’t use such a platform at all.
Boosting Adoption Rates
With this in mind, financial institutions and other businesses have a vested interest in getting more people involved with mobile payments in their everyday lives, and they’re trying to build those bridges now, according to American Banker. For instance, U.S. Bank recently launched a new credit card that incentivizes users to use mobile wallet platforms to make purchases with the account. Specifically, it will offer triple rewards points for any mobile purchase – in much the same way it provides triple points for travel-related purchases.
“We heard from customers that they do everything from their phone and asked for a rewards experience that capitalizes on the control consumers have from managing everything in one place,” John Steward, president of retail payment solutions for U.S. Bank, told the site. “So we designed a card that both allows for earning and redemption via mobile.”
In More Pockets
The good news is that the technology necessary to actually make mobile payments is now in more devices than ever, and that number will only continue to grow as time goes on, according to new research from IHS Markit. By the end of the year, about 3.4 billion smartphones worldwide are expected to have mobile payment technology embedded in them, and that number should grow to 5.3 billion by the end of 2021.
Right now, about 61 percent of smartphones are compatible with Android Pay, compared to 11 percent with Apple Pay, the report said. However, here too it’s vital for rewards programs to become prevalent if more people are to sign up in the years ahead.
“Mobile payments services can use reward programs to engage retailers, banks and customers, adding co-branding value in terms of marketing spend and brand recognition,” said Ruomeng Wang, mobile and telecoms analyst at IHS Markit.
As mobile payment adoption grows among consumers, it’s vital for merchants to meet those preferences head-on, and accept as many types of popular payments as they can.Back To Blog