by Joe Fortunato, a freelance writer
More than 60 per cent of North Americans believe that (according to Harris Interactive) smartphones will replace credit cards and cash, and 43 per cent believe it will take less than 10 years. While the timeframe is debatable, it’s clear that our future lies in mobile payments. Several major US businesses have been investing in mobile money and customers are responding positively. Let’s look at four ways mobile money services are changing the way people shop.
Payment apps increase customer loyalty
I can’t talk about mobile payment apps without bringing up Starbucks, because it’s the poster child for what most other US businesses want to become.
Starbucks processes almost five million mobile payments each week.
Furthermore, a whopping 30 per cent of total transactions are done with either the Starbucks app or the loyalty card.
“Starbucks currently has 10 million active users of its payment app”
The Starbucks app (available here for iPhone and Android) is a success because it caters to the hyper-loyal regular customers.
Gold card members receive a free drink after every 12 purchases, so they would have been regularly loading money onto their cards anyway.
Starbucks has simply removed the actual card aspect by letting people reload through the app and even set up automated deposits.
Rather than convincing coffee-drinkers that they needed the app, Starbucks looked at the purchase-process and asked how it could be more efficient.
The results have been clear: Starbucks currently has 10 million active users of its payment app.
Mobile is making industries evolve
One of the most successful mobile money services of late has been the rise of mobile banking.
North Americans are no longer sprinting to the bank on Friday or waking up before noon on Saturday to deposit paycheques, and they don’t have to wait for monthly statements to manage their finances.
Almost all aspects of banking have been moved online.
The rise of mobile banking has actually led to brands in other industries to adopt money services.
US MNO, T-Mobile, recently launched Mobile Money for customers to handle personal finances through their service provider.
With Mobile Money, users can deposit cheques by taking pictures, view their current balance, and withdraw money from ATMs inside T-Mobile stores.
This is also brilliant from a marketing aspect, as it will bring customers back to T-Mobile stores more often – not just when they break their phones – and might even draw in potential customers in need of an ATM.
For banks, the message is clear – evolve with the mobile revolution or you could get replaced by almost anyone. Even MNOs or MVNOs.
Mobile & social are closely linked
As social networks look to monetise, they’re going to start making it easier for users to buy products through their sites.
We’ve seen this on Pinterest with the dollar sign tabs on purchasable products.
Both Facebook and Twitter are making moves to improve mobile payments.
Soon on Twitter, users will be able to make a purchase using a specific hashtag (according to Harris) that’s attached to their credit cards while Facebook users could simply type “buy” to have their card charged.
In 2014, more social media purchasing apps will become popular. With 48 per cent of daily active Facebook users coming from mobile, social media will have a major hand in the evolution of m-commerce.
Payments will be tied to all mobile aspects
Mobile payments can be linked to an MNO [Mobile Network Operator]; social media accounts, and also your email.
Google has been developing and improving its Google Wallet over the years and it’s starting to catch on.
Users are able to sync their bank accounts to Google Wallet and send money to any email address.
If you owe your friend $50 for concert tickets – email the money to them. The increase of mobile money services means that you can pay with any and all aspects of your smartphone.
The main theme of all of these apps is ease of purchase.
We’re starting to evolve out of the days when we filled out pages of information online each time we needed to buy something and entering an era where we buy things with just a click, a word, or a scan.
Cash and credit are out, mobile is in, and it’s up to both online retailers and brick-and-mortar stores to adapt.
Joe Fortunato is a freelance writer from Tampa, Florida. He enjoys learning about new subjects, following his Baltimore Orioles, and traveling the country for fishing. You can followJoe on Twitter @joey_for