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Consumers want mobile payments. Mobile wallet usage has been rising steadily among consumers. For many, it's more convenient than having to use cash or even a credit or debit card. Gartner estimates that mobile payment volume will nearly triple in the next three years.1 A mobile wallet lets a consumer choose between payment methods on the fly and the ability to control all of their payments through a single device. Banks and financial institutions’ marketing teams that want to take advantage of mobile payments and the mobile wallet trend will need to act fast to capture this growing segment of the market.
Mobile wallet support is increasing rapidly.
Mobile payments were a pipe dream for a long time because they didn't have significant support. For a mobile payment option to really be usable, it needs to be adopted by a significant number of merchant companies at once. Otherwise, the consumer quickly becomes disenchanted with the inability to pay for common goods when they want them.
Marketing for mobile payments has increased due to backing by larger companies. PayPal payments are now accepted at many everyday stores throughout the nation. To grow adoption, PayPal has created a search tool that specifically identifies merchants that accept PayPal payments.
Google has now integrated its Google Wallet product with its smartphones. While Google Wallet has existed for many years, it never truly took off and didn’t have a significant distribution channel. Now Google Wallet will be available to more than a billion devices. Additionally, the Isis mobile wallet has also been launched as a joint venture between several major smartphone companies (including Verizon and T-Mobile) and will be used by more than 200,000 vendors.
The stage is now set for significant marketing for mobile payments. Two-thirds of Americans have smartphones and any smartphone can be turned into a mobile wallet with the simple download of an application.3
What does the mobile wallet market mean for banks?
Mobile wallets could create a disruption beyond simply moving transactions away from banks. With PayPal's Here mobile functionality, payments can be received and goods can be purchased by a user without ever touching a bank. Funds can be saved directly within PayPal's accounts and can be spent out from these accounts directly. Many consumers may be enamored of this simplicity and feel a mobile wallet is simply more convenient for them.
Turning the mobile wallet trend into a positive through adoption.
Bank marketers need to combat the mobile payments trend if they are to remain in the consideration set for payments. The growing consumer need for convenience is driving them toward more effective and efficient payment options. However, mobile payments aren't always the most effective options; in fact, online payments are often considered much easier. Online payments can be scheduled easily and 51% of adults now do their banking online in the United States.4
While consumers can use Google Wallet and Isis to make payments, they are still not a bank and often need to be linked directly to a bank. Banks that have more comprehensive and consistent online functionality will become more popular; users will want to be able to quickly view their transactions online or even through a mobile application.
Financial institutions should focus on aggressive marketing programs to grow their applications for mobile payments, promoting that they are equally as convenient as mobile wallet applications.
To truly survive in this market, banks will need to move more toward online functionality. It isn’t enough for your financial institution to offer mobile payments. Bank and financial institution marketing teams need to make a serious commitment to growing adoption. Mobile wallet payments could, in fact, be a boon to everyone involved: The streamlining of payment methods will ultimately make it easier to track transactions and keep consumers happy. Mobile wallets are not going to go away; they have been pushed for by the consumer market for many years. It is now up to the banking industry to take advantage of this trend.