GPShopper: Businesses That Offer Mobile Payments Can Steal Customers From Competitors, a Study Finds

GPShopper: Businesses That Offer Mobile Payments Can Steal Customers From Competitors, a Study Finds

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15% of U.S. consumers have used a mobile wallet—including Apple Passbook/Apple Pay, Google Wallet/Google Pay, PayPal and Starbucks—during the first half of 2015, which is up from 9% during the first half of 2013, according to a study of 1,716 consumers by research and consulting firm Chadwick Martin Bailey. Beyond the 15%, 22% of consumers say they plan to try using a mobile wallet by year’s end, the study finds. So about one in every six U.S. consumers use mobile wallets today, and that number could very soon rise to more than one in three consumers.

Here are the key stats from the Chadwick Martin Bailey study: 27% of mobile wallet users very likely will switch to another business if that business offers mobile payments, and 18% will increase the amount of business they do with a company if that company debuts mobile payments.

I looked in my mobile wallet (Apple Passbook) recently, awaiting a movie to begin after using mobile tickets to enter the theater, and was amused to realize I make fairly healthy use of a mobile wallet. Look at the accompanying image of my mobile wallet: There are two credit cards, one debit card, a Walgreens loyalty card, a AAA member card, and a Fandango movie ticket. Event tickets and coupons also have graced my mobile wallet.

So I say I was “amused” because the only talk you hear of mobile wallets is negative, yet here I am with a rather full wallet. Why is it not a bulging mobile wallet? Not because consumers don’t like mobile wallets, but because retailers don’t offer mobile payments. If you could snap your fingers and make 100% of all retailers accept Near Field Communication (NFC), the wireless technology that facilitates payments between a smartphone and a retailer’s payment terminal, I guarantee you within 12 months of that snap the percentage of U.S. consumers using mobile wallets would easily rise to 33%. About 80% of U.S. mobile phone users have smartphones.

I use Apple Pay everywhere I’m able. I love it. (And I know how to use it correctly and thus realize it is indeed faster—and more secure—than using a plastic card. Click here for more on that sorry subject.) I truly look forward to the day when Illinois makes digital drivers licenses because then I will toss my leather wallet in my “Box o’ Memories” with my 8-track tapes and 45 records and other historical artifacts. The only reason I keep any cash on me today, I should add, is for situations where it is absolutely impossible to pay digitally or with plastic (for example, paying for and tipping a valet).

But guess what? In October, fingers will be snapped, and a requirement to use chip-and-pin card technology goes into effect. Retailers have been transitioning their old payment terminals to new payment terminals capable of accepting payment cards that rely on chips instead of magnetic stripes to communicate payment data. Chips are far more secure than mag stripes. And guess what again? Most payment terminals capable of chip-and-pin transactions also (bonus!) are capable of NFC transactions.

Hey retailers that don’t accept mobile payments—start accepting mobile payments. You’ve got or soon will have the technology. The more retailers that accept mobile payments (and promote mobile payments), the more consumers will use mobile wallets. And more consumers using mobile wallets means more opportunities for retailers to increase loyalty or gain new customers, not merely by offering the technology but by adding mobile coupons and mobile loyalty cards to the mobile wallet mix, merging the online and offline worlds into true omnichannel commerce.