11 April 2017

Merchants New Strategy, Mobile Wallets Why Merchants Adopt Mobile Wallet?

With increased usage of the smartphones, customers expect more from the merchants especially in buying experience. Customers don’t want to lose much time in the long queues, they want their purchase to be quick, safe, secure and available at any time and any platform like in-store, remote, mobile or in e-commerce web shops. Therefore, customers can use their smartphones to find a relevant product, compare the prices and finalize the purchase with mobile payment.

Researches show that 2 out of 3 customers who add items to their online shopping cart leave without finalizing the purchase which is why merchants are losing $18 billion annually due to shopping cart abandonment.

To remain competitive in a fast growing and innovative market, merchants who create consumer-centric shopping and enhance the customer experience will get the big pie from the mobile payments industry. As researches indicate, the efficient usage of the mobile wallets will increase the revenues of the merchants.

The mobile enabled world provides many benefits to the merchants that adopt the mobile strategy in the whole retail payment ecosystem.

M-commerce is replacing e-commerce

As defined by Kevin Duffey in 1997, m-commerce is "the delivery of electronic commerce capabilities directly into the consumer’s hand, anywhere, via wireless technology”. It can also be defined as new-generation e-commerce platform for the users to enable them to do shopping from their mobile phones or tablets.

Mobile commerce is an effective way to provide customers a new way of purchase method rather than e-commerce platforms. This is mainly because smartphone penetration and the time we spend in mobile devices are increasing rapidly. Additionally, a smartphone is not a mobile device anymore; it is a medium that connects the physical and online worlds. Additionally, we shouldn’t forget about the effect of the social media in m-commerce platforms, social shoppers are spending more money online than ever before.

Therefore; customers who regularly use e-commerce have started to switch their shopping habits to smartphones. As customers depend more on their mobile devices, they expect to get exactly what they need in the moment they need it so m-commerce sites and apps grows rapidly. This is why merchants who want to gain competitive advantage should own mobile wallet platforms and use them as major payment channels for their own products and services. 

As commerce goes mobile, so does the marketing

Mobile marketing is a way of doing multi-channel campaign activities and advertising of some specific product or a solution by using the delivery channels of mobile phones, smartphones and other handheld devices like tablets. There are various mobile marketing strategies including app-based marketing, in-game or in-app mobile marketing, QR codes, location-based marketing, beacon based marketing, mobile search ads, mobile image ads and of course the last one is SMS.

These methods shape mobile marketing and mobile availability of the merchants in recent years. Upcoming trend and most of the merchants are trying to adopt is location based marketing, which finalizes the deal with mobile payments.

For instance; buying a cup of coffee… The merchant can understand the exact location of the customer by using GPS, or by checking in with an app or by using the beacon. Once they checked in, merchant can immediately send a push notification as “Todays Choice” to customer’s mobile phone and if the customer is interested they can just tap and get the deal instantly. Once the deal is pushed, it can also be customer specific. If customer acts positively and responds, it can be finalized instantly via any mobile device.

All marketing activities are made to get more customers to the stores and increase the sales. Currently mobile marketing is the trending topic instead of sending info mails to a non-targeted group. By using the mobile activity tracking and behavior of the customer it is possible to make target oriented and even real time campaigns.

Additionally, merchants also make use of prediction algorithms. They can track their customers based on exact location or past purchase history as well as by cross checking the current merchant campaigns. Moreover, customers can use these materials to plan their shop list and even shop locations. Mobile based offers by using predictions can offer real-time direct contacts to the customers to make them easily decide to buy offered product or service.

Merchant mobile wallet services to win

Mobile wallets can support a wide range of services that can benefit both the customers and the merchants. As a starter, customers can securely store their payment cards as well as loyalty of prepaid cards to the platform to make instant payment transactions. Additionally, stored value account and gift card features are other ways that merchants can add value to their mobile wallet strategy. For the users are likely to use their mobile devices for payment purposes, most of the merchants can distribute their gift cards stored in mobile wallets. Customers can have one-time usage gift cards or balances automatically applied to purchases.

This is also backed by recent researches and data; the total volume of gift cards is projected to reach $15 billion by 2017 in USA and $160 billion by 2018 worldwide. 40% of consumers surveyed have lost a plastic gift card which gives merchants an opportunity to shift to mobile based gift cards. Additionally, 56% of surveyed consumers would like to keep gift cards stored on their phone. This makes the card easily accessible and decreases the chances of it being lost.

On the other hand; merchants can issue loyalty cards or they can already have current loyalty platforms, customers can link their loyalty cards with mobile wallets, so that real-time rewards, balance inquiry and redemption possibilities can be done on the mobile devices. Customers check and manage the coupons, offers, and status of loyalty programs easily.

Additionally, campaign solutions offer flexible scenario based campaign definitions. Integration with the loyalty systems, merchants have rich loyalty advantages. It is possible to manage point, discount, rewards, installment, RFM, airtime, mile, coupon, gift campaigns with instant earning and instant redeeming via mobile wallets.

No more loss at the checkout

Most of the time merchants lose customers during the checkout. Either because of the long queues or entering the same credentials again and again for the same merchant. Mobile wallets offer one click payment to shorten the time spent in the cashiers. So that customers don’t need to dig their leather wallet to find out the correct payment card and maybe loyalty card serve it to the cashier, wait for him to plug it into POS device then enter PIN code then wait for the approval and invoice etc. Mobile wallets are letting customers to skip these steps and make them finalize the purchase by their mobile devices.

Thanks to the mobile wallets, customers can also easily receive and store digital receipts and check previous transaction history.

Mobile wallets to enhance customer experience

Today 75% of shoppers stated that they use their mobile device while shopping in-store and 84% of them use their mobile phones to help them shop.


There have been some good examples for merchant’s worldwide usage of mobile wallets in market actively especially in 2016. Starbucks already drives 16% of its total transactions from payments via its mobile app. Walmart also launched its own payment system, Walmart Pay. Customers can store their invoices, gift cards, prescriptions, shopping lists and of course make QR code based mobile payment.

The success of these mobile wallets can simply be defined as the loyalty rewards they gave to their mobile wallet users. For instance; the Starbucks app in Turkey, offers customers a free cup of coffee in each 15 payment transactions by using the app.

Finally, as most of the researches show us that the largest retailers with the most loyal customer base will observe the outstanding impact from mobile payments in the following years. The race will not be among the merchant wallet apps; it’s how merchants can improve the customer experience in mobile for payments. Lastly, merchant mobile wallets will indeed open new doors for big brands to provide their customers with better mobile wallet experiences in following years.




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