Last evening I threw a party at a popular pizza joint, in celebration of my promotion. At the checkout, I realized to my horror that I had left my wallet at home and had neither cash nor card to pay with. I had to borrow money from a friend to settle the bill. Had this restaurant signed up for a mobile wallet service, I wouldn’t have faced such embarrassment. With the growing numbers of smart phone users and tech-savvy population across the world, mobile wallet adoption should have been a done deal; yet, we continue to carry physical wallets. The reason is that there are a number of bottlenecks hindering adoption by both merchants and consumers.
In the case of consumers, these are either security concerns, low awareness of the technology, resistance to change, or lack of appeal of mobile wallets. On top, the retailers who do accept mobile wallets have largely restricted them to payments. They must try to expand the use of mobile wallets by adopting solutions that enable them to run loyalty programs and discount promotions based on user profile, and communicate the same to customers via mobile apps. This strategy of making offerings based on a user-first approach will help merchants increase in-store sales and reduce delivery time.
At this stage, with multiple options floating around and no single market leader in the mobile wallet space, customers and retailers are in a confused state of mind. Retailers are not convinced about the benefits of this technology and hence do not bother to educate customers. Mobile providers should take up the responsibility of building technology that can make payment transactions easy, convenient and cost efficient, to encourage mainstream adoption of the mobile wallet.
Currently, the mobile wallet service is restricted to big retailers for in-store payments only. When companies like Square, Paypal, Google Wallet and ISIS are redesigning the mobile wallet to better suit customer and merchant needs, it is important to follow their lead and enable the payment of utility bills and the bills of small vendors like taxi cabs and grocers to accelerate adoption.
Banks and Financial Institutions are also reluctant to adopt this technology, and are confused about whether to partner with the mobile service provider or develop their own wallet. Since customers must link an account to a mobile wallet application for payment, Banks and Financial Institutions should provide a master wallet feature enabling consumers to add multiple mobile payment applications and use them at their discretion. This will help the institutions stay on top of mobile wallet service providers.
Here’s hoping that the mobile wallet will be a preferred option to the credit card or even its physical counterpart someday soon.