The Rise of Mobile Payments and What You Need to Know

May 5, 2016 Nicole Klemp

You’ve likely heard the advice to “think mobile first” when it comes to designing your Customer Experience. This is especially true in commerce, as more consumers are using their mobile devices to research brands, share product information, and ultimately, to shop. Forrester predicts that the “mobile internet” will soon become meaningless. In other words, consumers will stop considering internet access on their mobile device as a scaled-down version of the “real” internet. Even when people are at home with access to alternative devices like laptops, mobile devices will still be their go-to technology.

One of the latest hot topics in the world of mobile is the use of mobile payment methods, like Apple Pay and Android Pay… and Samsung Pay, and all of the other pays that have hit the mobile market recently. Most customers fall into one of 2 categories when it comes to mobile payments: they’re either using them already, or researching the best options. More and more businesses are starting to accept mobile payments, and some (like Samsung Pay) claim you can already use their payment method almost anywhere.

How do mobile payments actually work?

When using mobile payment methods, like Apple Pay, you must store your credit/debit card information in an app (like Apple Wallet). The card you designate in the app as your default card will be the one charged when you use your mobile device to make purchases. (You can also select a different card from your Wallet with a couple of extra steps.) When you’re shopping in a store that accepts Apple Pay (or whatever method you’re using), simply unlock your phone and hold it up to the credit card terminal. Thanks to technology called Near Field Communication (NFC), your saved credit card information is sent wirelessly through the terminal, as if you had physically swiped a card.

The idea behind mobile payments is that people will no longer need to carry credit cards; just one more thing our mobile devices eliminate the need for — along with calculators, paper maps, and notepads. But just like credit cards before it, the popularity and use of mobile payments will grow as they are more widely accepted by retailers. (Remember when people wrote checks at the grocery store?) Just as it took some time for credit and debit cards to catch on as a method of paying for everyday items, mobile payment is still a new concept for many. But paying with your phone will inevitably become as routine as swiping a card or handing a cashier a $20 bill.

Online checkout on mobile

Forrester predicts that this year, mobile and tablet commerce will reach $142 billion in the US, and represent 38 percent of all online transactions. They also believe that more than 30 percent of sales will have a mobile cross-channel component. In other words, those customers will use a mobile device at some point in the customer journey, be it during product research or in-store interactions.

Online retailers must be mindful when it comes to creating an experience that leads customers who are shopping on a mobile device to also complete their purchase on that mobile device. If they don’t feel comfortable completing the transaction right then and there (and want to wait and do it on the “real internet”), they are less likely to ever complete the purchase. The brilliant minds at Google have some ideas for creating an online shopping experience that will encourage customers to not only shop on their mobile devices, but to complete their purchases as well.

How to get people to checkout on mobile:

  • Resurface promos and coupons at checkout — If users have to leave the app or mobile site to hunt for available promo codes they are more likely to abandon their cart. Seeing a discount at checkout can also be a big motivator for completing the purchase.
  • Allow users to checkout as a guest — Customers (particularly ones using mobile) expect the quickest, most convenient shopping experience possible. If new customers are forced to create an account before checking out, you may lose a few. It’s best to allow a “checkout as guest” option and encourage them to create an account after they’ve made their purchase.
  • Ensure a secure checkout process — Data breaches are top-of-mind for today’s customers, so provide them with reassurance that their personal information will be transmitted securely. Your site or app should follow modern data security best practices (like https and password encryption) and provide a visual security indicator.
  • Provide third-party payment options — Provide alternative payment options like PayPal, Apple Pay, and Android Pay. This can help shorten checkout time by removing the need to fill out additional information. It will also give customers another reassurance that their data will be secure.
  • Provide a detailed purchase summary — By providing a detailed transaction summary, customers have peace of mind that their purchase went through correctly. This also allows them to contact the retailer if there was a mistake with their order.

Learn more about creating mobile-first strategies and seamless customer journeys in our ebook, Creating Exceptional Retail Experiences.

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