As I mentioned in my last blog, I was lucky enough to attend the high-spirited Wallet Wars conference in New York earlier this month. In amongst the action, it became apparent that the general consensus is that the mobile wallet can become big business, but it still has a number of hurdles to overcome.
More recently, the concept of the smartwatch has been introduced into the mobile wallet debate. The potential market for smartwatches could be as high as $50bn by 2018 according to bank Credit Suisse. Using NFC technology, a smartwatch could easily be used as a mobile wallet, but perhaps this idea is a little further down the line, as NFC is still to penetrate all of the most popular phone handsets, notably the iPhone.
Another factor for the mobile wallet industry to consider is the coupon process and this idea was discussed widely at the Wallet Wars Conference.
It is my opinion that a massive shift in adoption will come from offers. The public will start questioning why they are paying full price if others can get offers when paying with mobile. At the conference, it was also revealed that retailers are ready to pay up to 9% for acquiring new customers, but challenging payment acquirers for 0.1% fees. Retailers are starting to place less and less value on loyalty points and more and more on gamification. This will have a major impact on the effectiveness of a Mobile Wallet. Gamification has been proven to improve customer engagement and can lead to much higher brand loyalty.
For retailers, mobile wallets open the door to consumer engagement and the amount of data that can be collected. From an additional security standpoint, retailers will not want to share the data they have worked so hard to collate. In a world where customers are more transparent than before, data has become a valued product and one which retailers will work tirelessly to protect.
It is clear that Mobile Wallets will be a big industry and whoever can breakthrough with that ‘iPod moment’ will enjoy the spoils of the Wallet Wars. What are your views?