The changing face of mobile payments

Shoppers are gradually but surely feeling increasingly at ease with paying for goods on their mobile devices, yet the majority of shoppers are purchasing only small-ticket items. This was demonstrated by recent research we carried out that found that 46% of consumers are willing to spend up to £10 on their mobile/tablet device, but this plummets to 17% for those that are willing to spend between £51 – £100 and to 4% for those who are willing to spend between £101 – £500.

But things may be set to change dramatically with Apple’s announcement that’s its next iPhone will have a ‘‘mobile wallet’ function’. With consumers already feeling comfortable paying for goods via Apple (think iTunes) they may be far more encouraged to use this function than they otherwise would.

A ripe opportunity

Just 9% of consumers look to purchase things from their mobile devices daily, according to a finding of our research. This presents brands with a sizeable challenge and opportunity to ensure mobile is a purchasing enabler rather than a purchasing deterrent and to further improve mobile commerce – encouraging more consumers to pay on mobile.

With this in mind, and as mobile internet usage clearly continues to grow, businesses need to ensure they have a mobile-appropriate payment experience. Services like Paypal, and the recently launched Amazon Payments, reflect the need to overcome issues such as consumer trust and the provision of a seamless user experience which is appropriate to the device on which the transaction is being carried out.

Time for remote payments of quasi-physical products?

Paying for items such as car parking and digital tickets (quasi-physical products) on mobile provides a huge opportunity for businesses to exploit. The potential effects, and return for the business, can be seen through two simple scenarios:

Scenario A:  On the day of a show, a cinema or theatre with spare tickets sends a push notification to users of its app who are within an X mile radius, 30 minutes before the start, detailing a discounted offer.  Users can buy the discounted ticket in two clicks on their mobile, charging it to their bill.

Scenario B: An Offers website, such as Groupon or Wowcher, sends out daily deals, incorporating a “charge to mobile bill” option for services that cost up to £30. The high proportion of users who read email on their mobile now has a significantly more convenient means of making payment.  Two clicks and the purchase is undertaken, with the voucher sent to the mobile device.  Conversion (i.e. from payment page to paying customer) can increase from less than 5% to as high as 70%.

Of course mobile payments aren’t limited to such products; low-cost physical goods, such as a takeaway pizza or a can of coke from a vending machine, could be charged to your phone bill – at least in principal, and undoubtedly in time will be.

The importance of having a mobile CRM system

Companies who use mobile, be it to send personalised or location-based offers to customers, or enable mobile payments, must consider implementing a mobile Customer Relationship Management (CRM) strategy. The merits of CRM and targeted customer engagement are well known; yet with mobile Internet customers, CRM and personalised engagement remain in their infancy. Many companies still don’t even have mobile-optimised sites and so the concept of having a fully integrated CRM solution, which is agnostic to the means of interaction (mobile, PC, OTT etc.), and which provides a full view of the customer and thus enables the best possible engagement and customer experience, is still largely unfamiliar.

Yet this is something that companies leveraging mobile need to become familiar with. A key question to ask is how mobile CRM can fit in with the overall e-commerce strategy. As mobile grows, this will be imperative to provide an expert, enjoyable and smooth customer experience.

For marketers, this may seem like unknown territory, but with the huge untapped opportunity available here, the time and investment in developing mobile commerce will prove fruitful.

The information included herein is distributed for informational use only; it does not constitute legal advice and should not be taken as such.  All clients are responsible for meeting legal requirements and other rules that apply to their messaging programs.  Consultation with legal counsel is strongly recommended.

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