LatestThe Advantage of Mobile Payments Over Traditional Wallets, and their Influence on Loyalty
Just a few years ago it was hard to believe that mobile payments would replace plastic cards. However, thanks to digitization, the development of technologies, and the popularity of smartphones, this is just what has happened.
Just a few years ago it was hard to believe that mobile payments would replace plastic cards. However, thanks to digitization, the development of technologies, and the popularity of smartphones, this is just what has happened. Nowadays, it is more common to witness customers who pay with their phones or watches for their purchases. What’s more, companies are starting to lean towards this method as a new channel to communicate with them. But what stands behind the success of mobile wallets, and what does it mean for loyalty?
Traditions vs. digitization
As often occurs at the beginning, the introduction of new payment technologies was perceived with hesitation. However, new possibilities in a smart world soon became apparent. Let’s recall those times when we all had a wallet filled with not only cash but also credit and debit cards, IDs, different loyalty cards, important information and documents, “In case of emergency” contacts, and even photos of beloved ones. We kept all of these in one place, which came with a high risk of losing it or getting robbed in a blink of an eye. What’s more, it was necessary to keep this wallet all the time to be able to perform payments or collect points in shops. Not to mention that companies could only collect limited data regarding transactions such as the amount or type of payment.
Now let’s move to these days, when all we need is our smartphone. Mobile wallets allow the storage of all types of cards including debit/credit cards, loyalty cards, and even gift cards. Due to tokenization and high-quality secure mechanisms such as double verification, it minimizes problems connected with the security of data stored there. The possibility to keep loyalty cards digitally opened a new way for merchants to communicate with their customers. Based on actions performed with mobile wallet, they can now collect data that later on can be useful when creating a marketing strategy for companies.
What advantages does a mobile have in comparison to traditional wallets?
Security provided by tokenization and double verification
Rewards are often applied automatically during payments
Communication as a channel to communicate offers and other important information such as expiry date, reaching a new tier or points balance
Convenience, with each card in one place
Personalization based on actions performed, and geolocation so that companies can prepare rewards, communication, and coupons in the most appropriate form for members
Database expansion based on all of the above points, which gives companies deep understanding of their customer's habits needs and behavior
Their impact on loyalty
It is hard not to notice that all of this opens up a new way to build or upgrade an existing loyalty program. Based on members’ mobile wallet transaction history, companies collect data regarding transactions and can keep in touch with customers by sending notifications through wallet apps (for example, a reminder that certain coupons may expire soon, or information about existing promotions in the customer’s exact location). Moreover, it is much more convenient for a customer to keep all of their cards in one place. Therefore, mobile wallets are a mine of data that companies should consider exploring in order to fulfill their customers’ needs on a higher
