Apple Pay: More than a payment mechanism


By by Matthew Winters, CEO, Veoo

Apple Pay was announced in the US in late 2014 and launched with quite a bit of fanfare in the UK in July 2015. Today, most of the big UK banks and retailers have committed to support Apple Pay, although not all were part of the mobile wallet scheme when it first launched.

To date, the payment side of mobile wallets has received a lot of attention, but I would argue that the real innovation actually takes place once you move past payments and explore the other possibilities that mobile wallets open up. Only then will you see their potential to deliver true utility to consumers, reduces costs for businesses and ultimately drive more mobile payments.

Branded content

Mobile wallets provide marketers with a new way to create and deliver branded content, such as offers, coupons, and loyalty cards, to their customer base across both online and offline channels.  Consumers can save and organise offers and loyalty cards in a simplified way whilst marketers are armed with trackable, updateable and location-aware content to help them drive in-store visits, redemptions and return on investment.

The question often asked regarding retailers and mobile wallets, however, is that surely retailers have their own apps, so why would they want to use a mobile wallet?

Retailers are facing a challenge when it comes to mastering mobile commerce. Consumers are spending more time on their smartphones and companies are seeing more mobile traffic than ever before, but people aren’t downloading and using retail mobile apps. In fact, a 2015 Forrester study that looked at how smartphone users are engaging with retailers on their mobile devices reported that 85% of time on smartphones is spent in apps, but of that time, only 5% is spent in retailer apps.

Even once downloaded, retail apps still aren’t getting much use. Forrester found that only 8% of smartphone owners with at least one retail app used them daily, while 13% said they never used the retail apps they downloaded.

What appears to be holding retail apps back from being useful is that many customers aren’t willing to disclose the information needed for retailers to personalise and ultimately enhance the mobile experience. Personalised content, like purchasing histories, location services and stored credit card or loyalty information, drives usage and engagement. Privacy concerns however, and wariness of how the data will be used, suggest that app users aren’t giving that information up.

Willing wallets

That said, consumers are willing to use mobile wallets. According to the Forrester study, more than half of consumers would like to receive mobile wallet content on a weekly basis, and 70% will save an offer to their mobile wallet when presented with the option. Moreover, consumers are interested in receiving a variety of content via mobile wallets. For instance, Forrester found that 57% of adult smartphone users are interested in having access to loyalty program points and rewards within a mobile wallet.

Organisations can generate additional foot traffic in-store by making offers that capitalise on the context of someone’s location, and also variable factors such as weather conditions or time of day. For instance, a chemist on the coast on a hot, sunny day might offer pedestrians nearby a reminder to protect their skin from the sun along with a 10% off coupon for a tube of sunscreen. By making the coupon good for a limited amount of time (say, the next hour), the chemist can make the offer more urgent.

Retailers can also create more business by making offers of convenience. After someone locates a store and buys a product, naturally the store wants the shopper to become a repeat customer, which is why stores offer paper-based coupons at the point of sale. The same logic applies to mobile wallets.

However, in my mind, the real catalyst in this form of marketing is the consumer adopting the technology and interacting with the retailers and brands. All the pieces are in place for the mobile wallet to extend its influence on marketing way beyond payments and to become a real phenomenon. I believe we just need marketers and brands to see how powerful the wallet will be in the future.

Veoo is a dynamic messaging partner offering a complete range of enterprise quality SMS services.


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