In her comments about the future of retail for this blog, Gifts & Decorative Accessories editor-in-chief Lenise Willis stated that mobile payments are steadily increasing. “Consumers already rarely carry cash, favoring credit or debit cards, but in the next decade they may even abandon their plastic. Mobile payments aren’t just more convenient — with fewer things to carry — but they can be viewed as more secure with encryption,” according to Lenise.

The trend towards mobile payments is not only happening in the US. In China, WeChat Pay is the world’s largest mobile pay platform, with over 823 million people using it in February 2019 alone to send and receive money gifts for the Lunar New Year.  WeChat Pay has an astounding 1 billion active daily users, as does its closest competitor.

Mobile payment is the use of a portable electronic device (hence the term mobile) such as a smart phone or tablet to purchase goods or services. According to Lifewire, the top players in the US at this time are Apple Pay, Google Pay and Samsung Pay.  Mobile pay is also commonly used to transfer money to individuals through platforms such as Venmo and PayPal.  Funds can be transferred directly from a bank account, as they would be with a debit card, or deducted from an account pre-loaded with funds.

The increase in the use of mobile wallet payment methods parallels the trend towards using debit cards rather than credit cards – especially for smaller, everyday purchases.  This change is in part generational, with older people more likely to use a credit card, especially for larger purchases. But mobile pay is also on the increase because it is considered to be more secure than carrying credit or debit cards.  A PIN number, touch or facial recognition prevents unauthorized use of the encrypted mobile pay information.

The emotional aspect of using mobile pay is a fascinating study still in its infancy.  We do know that loyalty programs are an effective way to make customers feel more tied to a business. Mobile pay can be tied to proprietary loyalty rewards programs, allowing shoppers to earn and spend points with ease and providing them with coupons, gift cards and special offers. These options are usually only available for larger brands today, but they will probably become feasible for independents at some point.

Like many things, the preference for mobile pay often comes down to sheer convenience. An astounding 96% of American adults today own a cellphone (plus 84% of all teens), and are likely to have it with them most of the time.  If mobile pay means that they don’t also need to have either cash or a credit card with them to make a purchase at your store, you need to offer them the opportunity use a mobile payment. Check with your credit card processor to see how easily you can add that option to your payment terminal – and be sure to post signage indicating the types of mobile payment that you welcome.

Happy Retailing,

Carol “Orange” Schroeder