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By Kelly Passey
It seems like all of the necessary elements of mobile payment adoption have arrived.
The issue of cloud-based vs. NFC has largely been settled with Apple Pay and Android Pay going all-in on the latter. Security, tokenization and authentication are making big leaps almost daily it seems.
Two billion people will have smartphones this year, according to eMarketer, so the technology is already in the hands of consumers.
And finally the big players in the market have emerged and are swallowing up smaller players, a sure sign of a rapidly emerging platform.
But yet, adoption and use are still sluggish. Forrester reported $52 billion in mobile payments in 2014, which isn't a number to sneeze at by any means. But they're projecting an increase of only $10 billion in 2015, followed by a rapid acceleration to $142 billion in 2019.
At some point between now and 2019, a tipping point has to occur that will open the adoption floodgates. This is presumably the mass adoption event we've all been waiting for, right?
What will it be?
The question to be asked is why hasn't it happened already? After all, the world is obsessed with moving nearly every other aspect of their lives onto their mobile devices. Why not their payment mechanisms as well?
Here's why: in the midst of developing all the amazing technology behind mobile payments, most groups have overlooked the "Why?" for customers.
Why should they change from their usual payment methods? After all, it's still quicker to pull out a credit card and there won't be any worries about acceptance at the POS.
The biggest mistake the industry has made to this point is to position mobile wallets as "just another way to pay." Simply paying for things doesn't need to be fixed.
No, the mobile payment opportunity lies within the intersection of payments and value. Mobile payments will thrive in the journey to the POS, as the value-added components nascent to the mobile experience lend themselves to an all-encompassing, personalized shopping experience.
We put this theory to the test in 2014 and early 2015 when Access Development partnered with Softcard (later acquired by Google) to infuse just a handful of national merchant offers into their mobile wallet platform.
Among just 20 national merchants we secured for participation in the Softcard mobile wallet, we began to see over 35,000 redemptions per month in short order. That's the type of value that drives adoption and continued engagement. That value is appreciated by everyone involved – the user, the retailer, and the payment provider.
Smartphones are already in-hand during the shopping experience. Ninety-six percent of Americans use their mobile device to find better retail bargains (according to Shopular), and 560 million people redeemed mobile coupons in 2014, according to research house Juniper.
Payments alone won't be enough to bring in mass adoption. Receiving a special sale alert or push notification that inspires a visit to a store, being presented with a mobile offer, paying, and then receiving benefits from a loyalty program all within a mobile wallet app – that's the type of end-to-end experience that will motivate regular Jane and John Doe to ditch their physical wallets.
To drive behavioral change from long held norms, people often have to be incentivized. Ninety-six percent of the population uses coupons, according to RetailMeNot, and Colloquy reports that the typical American household has over 29 loyalty program memberships.
That means building better merchant relationships – not just for payment acceptance, but also offers, loyalty program integration, beacon push and pull data, and the other aspects of what makes for great customer experiences. It means leveraging spending data – collected in large part by those loyalty programs and coupons – to serve up valuable offers and content.
The tipping point for mobile payment adoption is when we begin to focus on "What's in it For Them?"
To this point we've done an amazing job building out technology solutions. Other pressing issues around security are also being supported as EMV expands, leaving us with just one major concern: value for consumers.
Kelly Passey is the EVP of business and product development at Access Development, a mobile commerce and engagement solutions company.