Walmart is joining the mobile payments game with, following behind the likes of Apple, Samsung, Google, Paypal, and even Starbucks. The new payment system, Walmart Pay is built into their mobile app, which already has 22 million active users, and gives consumers the ability to upload card information and pay for in-store purchases with the app.
Predictions for mobile wallet usage in 2016 contradict recent numbers. According to InfoScout mobile wallet usage dropped during 2015’s Black Friday. Apple saw 2.7% of eligible purchases being made through their mobile wallet, down from 4.9% last year. And Android only saw 2.0% of eligible purchases being made through Android Pay.
However, predictions for 2016 put mobile wallet usage on the rise. According to eMarketer, nearly one in five smartphone users will be using mobile payments by the end of 2016 and the value of mobile payment transactions will increase by 210%. On top of that, mobile wallet functionality is expanding. For example, Google Wallet is releasing an update that will allow users to send and receive money via text message to their Google contacts.
This trend points to an increasing emphasis on delivering seamless customer experiences. Mobile wallets not only reduce friction at checkout, they offer brands and retailers a way to create an even stronger customer relationship by controlling every step of the buying process.
However, brands and retailers shouldn’t be content with just offering mobile wallet payment options. While some analysts are comparing Walmart’s latest venture to Starbucks’ app, Walmart might not fare as well. As of its 2015 third quarter earnings report, the coffee giant was performing 20% of its transactions via its app. Why was it so successful? Well, the one thing that really sets Starbucks apart from other mobile payment providers is the utilization of a customer loyalty program.
A mobile payment option is great in terms of reducing checkout friction but, it doesn’t deliver on stickiness like a loyalty program. In other words, it may offer consumers an easier option when checking out, but it doesn’t do anything to increase their lifetime value. Pairing a mobile payment option with loyalty programs and other consumer engagement solutions like referral programs can give brands a leg up in garnering participation by creating an easy way offer incentives.
Brands and retailers should be thinking about seamlessness on a bigger scale than just the buying process. They need to think about it in terms of their entire customer relationship. By only delivering a seamless experience at checkout, they miss out on the opportunity to increase engagement and strengthen relationships in other ways.