Mobile Wallets Are Shaping Personal Finance for a New Generation of Consumer
As we charge headfirst into a tech-focused future, more aspects of people’s lives are being held in the cloud and on their smartphones. Consumers are engaging in a digital-only economy with eCommerce, online grocery shopping, and even banking with institutions that exist only online. From Silicon Valley startups to long-standing brick and mortar stalwarts, it’s easy to see why the fight for your wallet has taken a new shape in the digital age.
Changes In How The Market Is Accessed
Mobile wallets have made shopping online and in-person easier, faster, and more secure than ever. The market for smartphones has shown that people are increasingly placing security as a feature that they care about. These new security measures have allowed the digital marketplace to be a trusted space that billions of dollars flow through annually. According to the U.S. Department of Commerce, $601.75 billion was spent online last year just with U.S. merchants alone.
With this amount of capital moving through a digital marketplace, it’s clear that businesses need to put a heavy focus on optimizing their payment processing. Confusing shoppers is a great way to ensure that their order never reaches completion. When consumers find themselves in a big box store and the product they want isn’t in stock, it’s often faster and more convenient to order from the store’s app rather than waiting for the product to be back in stock or ordering in-store. Not only is it faster to pay from the app, but often has more options for the product and can be shipped faster.
Quick decision purchases are much more common as payment information is more quickly filled from apps and web pages automatically. Card information pulled from the device’s stored data can take less time than even swiping a card or inserting a chip in the point of sale. Stored payment information and one-click purchases make every online transaction faster and easier for both the consumer and business. Time at the register has also been reduced with near field communication, also known as NFC technology in phones and smartwatches. This is the technology that allows these devices to quickly, securely, and wirelessly communicate card information with the point of sale.
While digital shopping and spending are as popular and convenient as it sounds, because consumers value privacy, making sure that information is secure is paramount to success. Mobile wallets rely on the hardware and software that goes into keeping your personal information out of the cloud and only accessible to you. Some of the most important components have been:
- Widespread adoption of biometric security.
- Encrypted storage on the device that even the manufacturers can’t access.
- Two and three-factor authentication.
- Frequent security updates every few months.
- Privacy glass screen protectors to keep prying eyes at bay.
Businesses that utilize NFC payments are some of the most secure out there. By not even having the unsecured payment information in the sales system, that personal and financial information can never be accessed except to complete that one transaction. When optimizing payments, offering these security features goes a long way towards increased trust between you and the customer.
Painlessly Easy Payments
Managing mobile wallets has become even easier for consumers and often doesn’t even involve stepping into a brick and mortar branch to open an account. Many mobile banks exist entirely online and provide their customers with an award-winning design and customer service cues taken right from the formula perfected in eCommerce.
These start-up banks are quickly gaining accounts due to their attractive features and benefits. Some of the most valuable features of mobile banking include the ability (with some banks) to get your paycheck up to two days early, open an account without any fees, and enjoy award-winning app design for easy use. These kinds of tactics seem to be working because according to Business Insider Intelligence, over half of credit unions surveyed saw an annual increase in mobile wallet adoption (56%) and transactions (53%) in 2019.
As an eCommerce business, knowing about these trends plays a vital role in how you operate your business because an understanding of your consumer’s finances can help you better understand how to cater to them. For example, if your product offering includes subscription services or consumable goods, allowing your customers to link their online debit card to your store’s secure payment processing system can boost conversions by providing one-click shopping.
Many Millennials and Gen Z consumers have a subscription to either a service or a product that removes them having to go back into a website and reorder every time they run low on a product or want the service for another month. Implementing and offering incentives for autopayments is a great way to help ensure customers return and stays in contact.
Keep in mind, however, that these new banking products also mean consumers have a better idea of where their finances are going, meaning that they’re more inclined to avoid fees and save where possible. Offer your customers peace of mind by providing straightforward methods for opting in and out of auto payments, and look for ways to eliminate fees and lower costs.
Contact Is Key
Easy to find contact with customer service and advanced chatbots with stronger AI systems are essential for maintaining a strong line of contact with your customer. eCommerce has always been a form of dialogue between customers and retailers, and strong customer service has made brands must-haves over their competitors.
Advancements in AI-assisted chatbots have seen dramatic improvements across the industry. IBM found that chatbots are able to reduce customer service costs by over 30% and saw a 99% improvement in response time for simple requests. For larger eCommerce stores this is extremely valuable. Smaller stores like those run on Etsy could benefit just as much by sharing a customer service email and setting alerts for rapid response.
Text updates to consumers have exploded in popularity recently and now you can get a text from every step through a purchase—one text from your bank when the order is placed, a text when it ships from the seller, and even when it gets delivered from the shipping agency. Constant contact throughout the sales process is valuable to new customers and even more so when there is a concern with the order.
Keeping these tips in mind, a one-size approach rarely works. Personalization and responding to customers’ concerns are the goal of chatbots and texts to the customer. It’s what you have to say and how it relates to the customer that will make the difference in a one time sale and a returning, loyal customer.
The way we accept payments and connect with consumers has changed drastically over the last few years thanks to advancements in the technology we were already adopting. Luckily, the more we observe people using them, the better we can optimize mobile portals and integrate the latest groundbreaking technology. The next mobile wallet or another piece of hardware we can’t even imagine could be around the corner and early adoption of that could turn an already great marketplace into a leader in the space, so long as the right team can see the trends.