Maximizing the full potential of mobile payments

Mobilepayment 2

Mobile technology has the potential to disrupt traditional behaviors and commercial solutions, replacing everything from coins and plastic cards to stationary ATMs. Merchants are striving to respond to this new mobile lifestyle by creating seamless purchasing experiences that engage customers and keep them returning for more. Mobile payments—whether in the form of mobile wallets, mPOS or in-app payments—deliver consumer ‘must-haves’ such as convenience, speed and security.

Mobile POS payments, worldwide statistics

Studies reveal that the popularity of mobile payments is on the rise, showing that transaction value in the mobile POS payments segment will amount to USD 745 million in 2019. Transaction value is expected to show an annual growth rate of 30.1% by 2023. Moreover, within this segment of transactions, the number of users is expected to reach 1,657.5 million by 2023, with the average transaction amount per user in the mobile POS payments segment valued at USD 658.1 in 2019.

Champions in mobile payments

Affluent consumers

The wealthy have the highest adoption rate of mobile payments, with 4 in 10 users coming from high-income households . This makes mobile payment solutions very relevant to retailers offering premium goods (in traveling, education, transportation, insurance, etc). Nevertheless, an Ipsos survey found that on average, 6 in 10 affluent consumers with USD 100,000+ annual income purchase luxury goods/services only once a year or less. As many affluent consumers are hesitant to indulge in luxury purchases too often, marketers advise not to assume that the affluent are idle; most are married, family oriented, and part of two-worker households. They also warn that retailers should not assume that wealthy consumers are willing to spend blithely. It’s true that they do occasionally indulge in luxury, especially on experiences such as travel, but for the most part they are careful with their spending.

Chinese consumers

From a global comparison perspective, more than half a billion people in China will be paying with their phones in brick-and-mortar shops, cafes and restaurants in 2019, according to the Statista Digital Market Outlook. That equals a penetration rate of more than 35%—the highest in the world. Chinese consumers tend to be very brand sensitive, as they believe that a name indicates the quality of a product. They are eager to find out what is available, particularly concerning foreign products. The price a consumer is willing to pay for a product has also increased in recent years. Overall, China is the largest market for global luxury brands, accounting for approximately 47% of global sales of consumer luxury products, according to a study from SantanderTradePortal. This presents a huge opportunity for merchants.

Staying ahead of the mobile payments curve requires agility and responsiveness when developing solutions. For merchants, this means seeking out vendors who combine the security of credit cards with the convenience of smartphones, offer a wide range of mobile payment solutions, and take the regulations, data protection laws, and consumer preferences from each market into account. For consumers, this is a golden age of massive innovation that supports great customer experience.