With the availability of the wide range of options, it is expected that there would be a rapid rise in the overall adoption rate. However, this is not the case. As per the recent study reports of Business Insider Intelligence, it has been observed that the volume of in-store mobile wallet payments in the United States of America is going to quintuple in the coming period. However, the overall usage is falling behind significantly as per the expectations. The overall estimates of 2019 fell far below what was expected a year back.
Popularization of Leading Mobile Wallets
Even after promising aspects that would drive gains –like enhanced incentive programs for encouraging engagement & adoption and normalization of the NFC technology, it is imperative for wallet providers to look into the existing problems that hold innovative mobile wallets back. Some of the major issues in the given field are limited repeat purchasing, customer satisfaction with ongoing payment methods, and the overall consumer confusion due to fragmentation.
Some of the leading mobile wallets are Apple Pay, Android Pay, Samsung Pay, Microsoft Wallet, PayPal, Square, MasterCard Masterpass, Visa VDCA, Venmo, and other types of retail merchant wallets and bank apps.
As per the reports of the Payment Ecosystem Report –responsible for examining the payment ecosystem in the modern era, it forecasts the overall growth while defining the major drivers for significant types of digital payments across 2024. The report aims at highlighting major trends that are shifting the modern modes of payments. It aims at looking at how different factors are creating change across the entire ecosystem.
Barriers to the Adoption of Proximity Mobile Payments
A larger portion of unbanked populations and the overall lack of infrastructure have been holding back the overall adoption of proximity mobile payments in some of the emerging markets out there. In highly developed nations like the United Kingdom, Australia, and Finland, the overall increased use of the concept of contactless payments has served to be a major barrier to its adoption. Security and privacy are also major concerns for most consumers all around the world.
As per the reports of eMarketer, Starbucks app is one of the most widely used apps for payments across the United States of America. The app features as many as 23.4 million users. At the same time, Apple Pay boasts having 22 million users and Google Pay has around 11.1 million users. There are some specific reasons why the given digital wallets have outperformed other leading technologies or competitors. They have worked extensively on some of the innovative strategies like:
- Normalization of the NFC technology
- Improvement of the overall purchase experience and journey
- Elimination of the concept of fragmentation
- Addition of value to the overall user experience while making mobile wallets as frictionless and simple as possible
- Building innovative ways for ensuring repeat purchasing
The given range of factors remains critical when it comes to encouraging the overall adoption of innovative mobile wallets while ensuring that the consumers are engaged throughout.
It is estimated that the process of in-store mobile wallet payments in the USA is going to increase at around 40 percent compound growth annually reaching around $128 billion by the end of 2021. The overall spending with the help of proximity mobile-based payments is expected to reach around $100 billion by the end of 2021 in the United States of America. This implies that on an average, a user will have to spend around $1,545 annually with the help of proximity mobile-based payments.
In the year 2020, for the first-ever instance, over 1 billion people across the world have used the concept of mobile-based payment wallets or apps for making payments in-store in the period of at least 6 months.
Why is Starbucks the Most Popular Mobile Payment App?
Starbucks is known to maintain a lead over tech giants like Google Pay and Apple Pay as far as the field of utilizing mobile payment apps is concerned.
Starbucks has made itself a major success because of its ability to blend payments & its lucrative loyalty programs. For other companies and retailers that are pursuing digital transformation, it is important to note how Starbucks got there in the first place.
The mobile-based app for payment through Starbucks is a basic extension of the respective retail experience. Moreover, customers are also provided with the ease of clear returns. Customers receive loyalty points, discount coupons, and additional benefits like mobile ordering. In addition to savings, customers are also provided with the ease of time saving.
The mobile plans at Starbucks were blended with the in-store experience of the retail giant along with its broader digital expansion. The company’s ability to mix systems & rewards together boosted its overall success. The Starbucks app does not come pre-installed with smartphones or devices. Therefore, its overall lead is based on customer preference and real usage. Therefore, it features improved loyalty in comparison to other mobile app payment providers like Apple Pay and Google Pay.
It ultimately depends on the mobile wallet providers to enter the space for addressing the existing problems that are holding the utilization of mobile wallets back. At the same time, leading wallet providers should aim at initiating improved incentive programs for encouraging the overall adoption and engagement.