If you’re a marketer that’s looking to put your money down on a mobile wallet platform that’s most likely to succeed, Apple and PayPal are the best bets you can make for the next five years, according to Forrester Research.
The convergence of payments and loyalty rewards programs into a single point offer marketers a real opportunity to boost conversion rates and drive sales, Forrester analyst Thomas Husson writes. To make the most of it, the time is now to test your mobile wallet campaigns and be planning to deploy contextual, real-time offers through these third-party apps. Forrester conducted interviews with vendors and payments providers to produce its report on the future of mobile wallets.
When asked, most consumers are interested in having loyalty points and rewards as part of a mobile wallet (57 per cent) or discounts and offers (56 per cent.) Meanwhile, marketers are catching on to the mobile wallet trends to, with 41 per cent saying they will use digital wallets in the next year – up from just 14 per cent in 2014.
Because consumers aren’t specifically looking for a new way to pay for things, expectations are high for what is offered by a mobile wallet solution, Forrester says. While a couple of brands have succeeded with launching their own mobile wallet apps – take Starbucks for example – it’s more likely that most brands will have better luck jumping on board a mobile wallet eco-system provided by the likes of Apple or PayPal. In the case of Apple Pay, which is built into the Passbook feature on its devices, customers won’t even need to download your app in order to be the recipient of mobile marketing in the form of digital coupons.
Many brands already using coupons via Apple Passbook or Google Wallet are reporting high redemption rates. Vibes, for example, is a mobile marketing vendor that is seeing a redemption rate of 21 per cent on its 400 mobile wallet campaigns for 20 retailers run since September 2012.
Forrester expects big things for mobile wallets over the next cuople of years. It’s predicting mobile wallet vendors will make more acquisitions to build on the eco-system that’s required to make a digital wallet valuable to consumers. It will be about three years, Forrester predicts, before mobile wallets reach the “critical mass” of seeing between 15-20 per cent of U.S. smartphone users using them.
Digital wallets offered by Apple, PayPal, and Chinese-market player Alipay will be offering huge payments reach to marketers. Apple has succeeded in being viewed as a mobile payment enabler by financial institutions and is seen as less of a disrupting threat that PayPal, the report says. On the other hand, PayPal has the lead in establishing consumer trust around payments. Alipay has the backing of Alibaba and is a key player to watch in Asia.
For marketers, the time to start experimenting with mobile wallet platforms is now, Forrester says. Since several distribution channels can be used to reach mobile wallet users, such as SMS, email, or mobile ads, determining the most successful approach will take some testing.