Making payments through a mobile phone — ‘M-commerce’ as it is popularly called — is becoming increasingly popular. There are more than 4 billion individuals today, using a mobile phone. And mobile payments in the US alone have gone from 14 per cent in 2014 to 39 per cent in 2016 and is expected to reach 70 per cent in 2017-18. This has helped the mobile payments industry and start-ups in the area transform to meet the growing needs.
Payment methods
There are different kinds of mobile payments now: payment through Internet browsers (where one is directed to a shopping cart and then receives the receipt), PIN-led (contactless technologies) and mobile wallets (storage of one’s payment information), to name a few. Hence, it would be erroneous to think that these transactions will remain limited to smartphones and tablets.
In such cases, Bluetooth plays an active part. The Bluetooth Low Energy (BLE) transfer takes place on either the consumer or merchant’s device, where data is stored in a mobile payment account such as PayPal, Apple Pay, Android Pay and Samsung Pay. Here, start-ups would begin with a text message service, then mobile apps and finally, contactless payment systems. Google is also toying with a facial recognition software to confirm an individual’s identity.
The other majors in the customer value chain — namely the banks such as JP Morgan Chase & Co, Bank of America Corp, Wells Fargo & Co and US Bancorp — have a created a joint venture called ‘clearXchange’ that allows customers to transfer funds instantly to another bank account through their phones. Retailers like Wal-Mart Stores Inc are rolling out their own products to fuel mobile payments, and provide additional services like location and customer coupon deals.
Social media and messaging apps have also jumped into the fray. Soon, one will be able to make payments through Facebook and Whatsapp. These organisations will act as a single platform for news, entertainment and commerce, creating formidable corporate giants. In addition, they will make targeted communication to clients for promotional offers much more effective.
This growth will have implications in the regulations front to ensure transparency and standardisation of payment mechanisms across the world. The trends indicate that by 2020, 90 per cent of smartphone users will have made a mobile payment.
Change in marketing strategy
A marketer has much to learn with these developments. First, the buyer behaviour, an important component of any consumer study, is radically shifting. Understanding these patterns across industries is a must. Second, brand loyalty is going to move hand-in-hand with mobile savviness and technology adoption for consumers. This means that brands that are not digitally forward have no choice but to be so in times to come, if they want to retain their customers. Also, a new segment called the ‘techno literate’ is fast emerging as a basis on which consumers need to be targeted, regardless of other segmentation criteria of age, gender, location and more . Finally, collaboration with stakeholders is expected to reach a new high. Evaluating tie-ups with banks and social media websites, as a part of a brand’s sales and distribution strategy, is becoming the need of the hour. Accordingly, competencies will need to be drawn for the marketing team.
“The future of mobile is the future of online. It is how people access online content now,” said David Murphy, Founder and Editor of Mobile Marketing Daily. And it is not hard to see why.