Gimmick or growth opportunity?
Gimmick or growth opportunity?
Unlocking the potential of the mobile wallet
With incentives from mobile payment mediums like Apple Pay and Samsung Pay, the market for mobile wallets has grown by 42% from 2013 to 2016i in Singapore. To add to the growing trend, experts predict an increasing connection between social media apps and paymentii, much like Facebook’s Messenger, which now include payment and check out services for business pages. Here’s how SMEs can tap into the growth and benefit from mobile payment:
Enhance business efficiencies
Integration of mobile payment has freed up processing time, administrative costs and cash flow for many businesses. For a start, your customers and staff no longer have to calculate and manage cash during check out, with payment automatically calculated and made in just one tap.
Additionally, mobile payment services like LevelUP charge lower merchant processing fees than credit cards, with its rate of 2% dropping to 1.95% and lower instead of risingiv.
Raise competitive edge
The British Chamber of Commerce notes that in Asia especially, consumers demonstrate a preference for non-card payment modes. They cite China as an example, noting that “we’ve seen people jump directly from cash payments offline to a robust mobile payments economy. Worldpay’s Global Payments Report found that more than 60% of online transactions in China are made using a non-card method.”i As mentioned by PM Lee during his National Day Rally speech, “cash has become ‘obsolete’ and even debit and credit cards are becoming rare, as everyone is using WeChat Pay or AliPay.”v
As one of the preferred modes of payment among customers due to its convenience, mobile payment can help to increase sales. For example, Deliveroo, which offers mobile payment options, has seen a 30% month-on-month growth. This is in part due to the seamless customer experience offered by the mobile payment feature.
Track mobile data
By tracking user behavior and creating incentives through mobile payment, businesses can better understand consumers and build customer loyalty. Use mobile purchase data to track how often customers purchase from you, as well as peak times, and preferred products. You can also use it to gauge which of your mobile promotions drive purchases, so you can make more informed marketing decisions.
In addition, as American Express’s Jennifer Gregory notes, mobile payment can help track your store’s inventory, so you can predict and prevent running out of stockvii.
Improve customer loyalty
Mobile promotions are another key way the mobile wallet can help you boost customer retention.
Henry Hegelson, CEO and co-founder of payment system software Merchant Warehouse, advises businesses on the best time to inform customers of promotions and loyalty perks. “One problem with the current shopping experience is that, while merchants are generally eager to offer customers incentives … many of these offers are handed over at the wrong time: at the register.” This barely gives consumers time to make an informed decision, having to decide on a purchase or incentive when they are about to leave the store.
Instead, “location-based services embedded in mobile payment apps could put the offers that consumers actually want in their hands at just the right time.”ix
In light of the benefits mobile payment can bring to both businesses and consumers, it is clear that integrating the mobile wallet into your business can foster growth. If your business is considering implementing mobile payment methods, consider tapping on the $5,000 Innovation & Capability Vouchers (ICV) from SPRING to give you a leg up.