Mobile wallets: Features are evolving beyond payments

The makers of physical wallets have yet to comment on the digital transformation, but proponents of mobile wallets are quickly envisioning a time when those leatherette filing cabinets full of payment and ID cards we lug around everywhere will no longer be necessary.

Aside from the benefit of pants that fit better without the bulging wallet aggravating waists, freedom from physical delivery through mobile wallets literally translates into better interactions with the biller, smoother payments, and the ability to see the world via smartphone to navigate.

Speaking to PYMNTS, ACI Worldwide Principal Solution Consultant, Tom Donovan laid out a number of use cases for how mobile wallets are enabling new and better experiences.

Clarifying that the mobile wallets we’re most concerned with are “the Apple Wallet app on iOS or the Google Wallet app on Android, both of which are natively preinstalled right on every smartphone today,” Donovan said on.

“The pandemic has really contributed to that growth because it’s gotten so many people thinking about ways of living without contact,” he said. “Put their card in their wallet so they don’t have to touch the payment terminal, or maybe keep a loyalty card there so they don’t have to hand it in at the checkout.”

This slow and steady adoption is evident in PYMNTS data with the August report, Mobile Wallet Adoption: Apple Pay @8 Still the Big Fish in a Small Mobile Wallets Pond, noting that “Adoption in Q2 has increased significantly and Gen Z consumers made almost one in ten transactions using mobile wallets, followed by around 8% for Millennials and Bridge Millennials.”

Donovan said he sees the slow pace of adoption now that retail and e-commerce infrastructure is catching up with mobile wallet technology.

Note that when Apple Pay launched, only about 3% of US merchants were able to accept this payment, today “that number is about 90% and growing. We’re getting that near 100% acceptance rate that you would see in many international markets where mobile contactless payments are much more widely used than here in the US.”

From Bill Pay to Gift Cards to ID

Various billers and merchants are generally getting more creative and intuitive with their mobile wallet integrations and features, so adoption could jump up and to the right.

Donovan rattled off various ways of how this happens, using a few examples from his own life. Speaking about seeing the movie Top Gun: Maverick a few months ago, he said, “I went on Fandango and bought my tickets so I didn’t have to wait in line once I got to the theater. There is an “Add to Apple Wallet” button right on the checkout page, so I was able to save this movie ticket straight to my mobile wallet to save time and streamline the process.”

From there, he moved on to a tasty use case of how mobile wallets can reverse the plague of unused gift cards, potentially unlocking billions of dollars in value.

For example, he said, “You can put a Chick-fil-A gift card in your mobile wallet so you don’t sit back and say, ‘I left my gift card at home when you go to Chick-fil-A,’ which I have been guilty of far too many times.”

Other use cases go even further, allowing billers to place bills directly into consumers’ mobile wallets. And as Donovan digs deeper into what mobile wallets can do, he found that more states are recognizing them as being able to carry a legal ID, threatening the old laminated license.

Pointing to the section in Apple and Google wallets called “passports,” Donovan told PYMNTS, “Loyalty cards, reward cards, coupons, I think last year Arizona was the first state to actually have an MDL — a mobile driver’s license.” – has introduced who lives in Apple Wallet. Maryland I believe went live as well. These can even be used at TSA checkpoints. It was a pretty aggressive move by Apple to go straight at the TSA.”

It was also smart in terms of adoption, as once a consumer tries the mobile credentials, there’s an instant delight and trust that builds, leading to more usage and making the old leather version we carry around seem more outdated with every tap.

See also: Merchants bring context to one-click commerce via smartphones

A wallet for the connected economy

Mobile wallets are tailor-made for the connected economy as they do much more than just pay for things. They are increasingly prompting us to buy things we hadn’t thought of, and merchants can take this mobile wallet and smartphone features like geolocation and notifications in new directions.

Donovan shared recently in downtown Philadelphia, Pennsylvania, “I’m only 100 yards from the Nordstrom facility. I see a notification on my phone because it knows I’m within range and it says, “Hey, you have a coupon that’s valid today.” That helps me go to Nordstrom. You would get an additional purchase and I would be glad I had that experience.”

Another real experience is the fact that he was recently engaged and a friend shared a cell phone wallet pass from David’s Bridal.

Shortly after, he said, “I started seeing these notifications from David’s Bridal on my phone and I was like, ‘Wow, this is actually relevant and timely to me.’ It is very useful and can certainly help increase engagement and make it very easy for the consumer to ensure they are always receiving their rewards, collecting their points or redeeming those rewards or credits for their purchases.”

Having eliminated the need for a physical wallet, keys are also on the list of what mobile wallets can rid us of through “access” features built into iOS and Android wallets, he said.

Both wallet apps now support the “Access” feature, so “instead of having, for example, a key fob in the office, [users can] Tap her phone on the front door of her office building to get in,” he said. “Or if they’re wearing an Apple Watch, they could tap that reader with their watch to access that building.”

This access can be partitioned and diced, giving network administrators different permissions than, for example, a gig worker. He added that the access feature is growing in popularity on college campuses, with a few dozen across the country using it to grant students and staff access to buildings.

The beauty of this phase of mobile wallet adoption is that once a person has tried it, they like it, even Donovan’s mother, who he said is not an early adopter of digital technology.

“Consumers see a lot of other people in the industry using this,” he said. “My mother isn’t particularly tech-savvy. She saw people doing it and asked me how they did it, so I showed her. Now she uses it quite often.”

aml / kyc

Around: The results of the new study by PYMNTS, “The Super App Shift: How Consumers Want To Save, Shop And Spend In The Connected Economy”, a collaboration with PayPal, analyzed the responses of 9,904 consumers in Australia, Germany, the UK and the US and showed a strong demand for a single multifunctional super app instead of using dozens of individual apps.

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