Cashing in on the Mobile Payment Future
The road to a cashless future is being paved by stand-alone apps, brands, and social platforms that are making mobile payments a reality for early adopting young consumers who want their transactions speedy, easy, and trackable.
In our predictions for 2015, we told you that this year mobile payments will officially become a norm, at least with Millennial consumers. In 2014 alone, Snapchat released Snapcash, Apple Pay has been getting more attention, and brand partnership, than ever before, and “Venmo me” became a part of Millennials regular vernacular. In fact, Venmo handled $324 million in mobile payments in the first quarter of 2014, up 62% from the previous quarter. More and more banks are offering their customers mobile pay methods to keep up with young consumers preferences for digital over cash. Brands are already integrating mobile payments into their interactions with consumers: Starbucks now offers delivery and payment through its app, and Taco Bell is pushing consumers to their app, where they can both order and pay ahead.
By the end of 2015, cash could be an endangered species, and it is young consumers who are slowly killing it. JWT’s infographic on Millennials’ movement away from traditional payment method outlines their influence: 50% of Millennials want mobile payment to speed up transactions, compared with just 26% of Boomers; and 52% want them to keep better track of purchases, compared to 27% of Xers and 20% of Boomers. According to their study, 62% of Millennials would be comfortable connecting their payment info to an app from a retailer or service they use frequently. Business Insider’s BI Intelligence has even more evidence that these young consumers are pushing the payment shift, reporting that 55% of those who say they use mobile wallets are 18-34-year-olds, and predicting, “[t]hese mobile natives are likely to continue to drive mobile wallet adoption.”
The generation is clearly laying the groundwork, and brands need to prepare for not just a cash-less future, but a mobile payment preference future as well. Here are three ways we see this future taking shape right now:
Stand Alone Apps
As early adopting brands like Starbucks and Taco Bell have shown, the mobile payment landscape will not just be about e-wallets like Apple Pay and peer-to-peer platforms like Venmo. Individual branded apps will be integrating payment capabilities—but we’re also seeing that stand alone apps that make mobile payments easier in specific situations. Reserve is an app being billed as “Seamless for inside the restaurant. The app lets users make a reservation at a restaurant on their phones, save their payment info, and set a tip amount they want as their default. The participating restaurants have their own Reserve iPad app for servers enter the diner’s meal information into. When it’s time to pay, diners don’t need to take out their cards—they simply walk out, and the waiter can charge them through Reserve. A competing app Cover provides a different take on the seamless restaurant payment service: users check in at the restaurant through the app, then inform their waiter if they are paying with Cover. Payment is then made through the app and split based on the number of people at the meal. According to TechCrunch, dozens of restaurants in New York and San Francisco are already participating.
Social Chat Apps
We’ve been telling you that 2015 is the year that mobile payments become a norm for young consumers, but we’ve also said that it will be the year that brands need to pay attention to chat apps as platforms as influential as social—and it might also be the year that these two trends intersect. WhatsApp (purchased by Facebook last year) and other text-based private communication apps have drawn in users by the million. Line, which is especially popular in Asia but quickly gaining ground in the U.S. announced in December that they will be soon introducing Line Pay, a tool to make payments through the app, to their users worldwide. WeChat has also added payment features, and other chat competitors are following suit. With huge user-bases already established, these apps could have great success, especially as they are already seen as platforms for more private and direct communication.
Mobile Social Hacks
It’s clear that payments through social platforms are the next thing on the horizon. Twitter has launched a mobile payment service in France, and Snapchat’s Snapcash launched in 2014. But until the major social media players make mobile payments a reality, opportunistic services are finding ways to hack them. Instagram has become a go-to for fashion inspiration and window-shopping, but Soldsie makes it shoppable by “processing payments for ‘comment’ transactions.” The way it works: a store posts a photo, if a registered Soldsie user comments with “Sold,” then Soldsie will alert the store via email and handle the transaction. The natural social component of Soldsie + Instagram also benefits the brand, as there are customer interactions, and friends can easily tag other friends to share items they like. The inevitable social media mobile payments frenzy isn’t here just yet, but there is clearly a hunger for purchasing and selling through the platforms. Startups like Soldsie are taking advantage of the lack, and helping to pave the road to a mobile payment future.