E-COMMERCE: LOYALTY DRIVEN MOBILE PAYMENT OPTIONS

E-COMMERCE: LOYALTY DRIVEN MOBILE PAYMENT OPTIONS

The mobile landscape has rapidly changed in the last three years to the point
that m-payments are not just for first adopters of technology. Euromonitor
estimates 80% of all mobile phones sold in the US and 59% of those sold
globally will be smartphones in 2014. This development means it is more
feasible for other merchants to launch successful m-payments platforms.
Such apps would be most embraced in environments that consumers frequent
weekly, if not daily. One possibility would be fast food chains. In fact, the
world’s largest fast food chain, McDonald’s, has mobile initiatives underway in
multiple markets, including Canada, France, the UK and the US. The Starbucks’
example drives home the importance of knowing the market in which your
company operates, as well as the unique qualities of your customer profile.

Telecom-led mobile platform Isis is in the initial days of nationwide deployment
in the US, but early results have shown greater adoption for those that signed
up for the attached loyalty programmes. Isis, the joint venture between
T-Mobile, AT&T and Verizon, enables users to make payments, collect points
and redeem coupons using NFC-based smartphones at POS terminals. Isis
began with a yearlong trial in Salt Lake City and Austin in October 2012 and
now has 10,000 locations where consumers can tap and pay.

These trials have indicated Isis users tap their device to pay for goods 10 times
per month on average. Most interestingly, those that signed up for loyalty
schemes were found to tap their devices nearly twice as often as those that did
not. Two-thirds of users had opted to receive offers and messages from the
participating brands with the average user following seven brands. Some of
the first merchants to have adopted Isis have gone so far as to say the loyalty
and data opportunities the wallet provided were of far greater value to them
than the mobile payment capabilities. Maverik, a gas station and convenience

Here’s a quick look at the way some new technologies are driving loyalty into 

payments:

Mobile POS devices: 

• Makes it possible for business to accept payments and track loyalty — 

perhaps for the first time

• These products first became popular with small businesses that might 

have found establishing a merchant account through the traditional card 

network daunting, if not impossible

• Now the technology is making inroads in larger stores that find value in 

the enhanced consumer interaction

Mobile banking apps:

• Banks are also seeing the potential of the mobile channel to drive 

consumer loyalty

• Such apps condition consumers to use and trust their mobile phone to 

execute financial transactions

• Mobile banking apps could be the precursor to an issuer-led mobile wallet

Digital wallets:

• Digital wallets, such as Google’s Instant Buy, Visa’s V.me and 

MasterCard’s MasterPass, store a consumer’s payment information in 

the cloud or on a remote secure server in order to reduce the steps to 

purchase

• The one-click functionality that digital wallets enable reduces the friction 

at the checkout for mobile purchases

This white paper contained just a glimpse of the content and analysis available
from Euromonitor International. Information for this white paper was derived
from the report The Mobile Wallet: How Loyalty Could Spur Consumer 
Adoption of Mobile Payments, examining the potential for loyalty to drive
mobile payments, which is available on Euromonitor’s website.

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