Why it’s Time to Invest in Mobile Payment Features
* This is part 2 of our “Future of Mobile Strategy” series, highlighting the top four profit-driving use cases for native mobile technology. Stay tuned over the next couple of weeks for parts 3 and 4. If you missed part 1, check it out. *
Are you looking for a better way to engage with your customers in their everyday lives? How about offering more secure transactions that protect your business and your customers?
Adding mobile payment features to your new or existing mobile app might just be the answer.
Today, major technology innovators such as Apple and Google are making mobile payments more accessible while credit card companies and retailers are making it easier for consumers to pay using their phones; all signs point to a major business opportunity.As advancements in security and convenience continue to evolve, mobile payments will increase as well. Business Insider Intelligence estimates that the number of U.S. in-store mobile payment users will increase to 150 million by the end of 2020, and in-store mobile payments, by volume, will reach $503 billion.
Traditional payment options are becoming a thing of the past
Let’s consider what might be one of the top pain points of your customers. Increasingly busy lives and rising expectations of technology mean people are looking for convenience. Now is the time to ask, “Is it straightforward and easy for someone to digitally interact with my business?”
Nowadays, cash is being used less and less to make purchases and pay bills. Cash transactions have to be made in-person - not so convenient. Neither is running out to the bank or an ATM to retrieve cash for unexpected, urgent needs.
Then there are paper checks. They are time-consuming because of stamps, envelopes, mail delivery, etc. Plus, approximately 95.7% of millenials polled said that they “never” write checks.
Physical credit cards and numbers are still very commonly used, but can be easily lost or stolen without the need of some form of secondary authentication for someone else to use.
Let’s look at some mobile usage figures:
- 7 in 10 adults in the U.S. own a smartphone.
- 57% of mobile users will not recommend a business with a poorly-designed mobile site.
- 72% of current mobile payment users are millennials or Gen Xers.
All roads lead to the fusion of native mobile technology and everyday financial transactions. Not making the switch could be detrimental to your business.
How native mobile applications improve the payment experience
Strong customer engagement is what drives profitable growth, and right now, a strong mobile presence is a key part of a customer’s willingness to make a brand part of their lifestyle.
Here are some of the benefits of native mobile technology, as they pertain to the customer journey:
- Faster, more convenient payment processing
No more digging to find cash, carrying credit cards, waiting for credit payments to process, or filling out paper checks. With a tap of a button, the payment is processed within seconds.
Reduced wait time for transactions frees up your employees to tackle other business needs.
Mobile payments are also much easier to track, making for a less daunting auditing process.
- Enhanced security
Digital security is a big concern for many of us. It seems like a new data breach is announced at least once a month. So how are mobile innovators keeping personal data safe?
ISACA, an independent association that provides knowledge and tools for information systems, documented the advancements made in mobile payment security in this white paper: “Is Mobile the Winner in Payment Security?” It explains in detail how mobile payments are more secure than physical and ecommerce transactions.
The three main security measures described are device-specific cryptograms, two-factor authentication, and tokenization. It’s all about concealing originating data under multiple layers. If hackers get to the data, it is unusable, as the information is either a random identifier or it can only be used from the original device (which can be wiped if stolen or protected by a second authentication requirement).
Banks are also getting better at detecting fraudulent charges, and if they provide zero-liability protection (most do) then no harm falls on the customer.
- Loyalty program integration
By incorporating payment features into your mobile app, you have a unique opportunity to build customer loyalty beyond the first purchase. If users have an enjoyable experience, they are more likely to check out what else you have to offer, especially when a rewards program is incorporated into the payment experience.
The opposite also applies. Customers that are motivated by rewards points are more likely to make purchases with those brands over others that do not offer incentives. A 2016 study released by Points shows that “90% of the people surveyed are likely or extremely likely to shop with a retailer that allows them to earn points and miles in their favorite loyalty programs.”
- Increased sales
In general, opening up more ways to receive payments opens up additional opportunities for business.
A recent study conducted for NTT DATA, Inc. found exactly that: businesses that utilize mobile payment tools grow faster and are more profitable than businesses that do not have mobile payment options.
Mobile payments in practice
BGE, a subsidiary of Exelon Corporation (NYSE: EXC) and Maryland’s largest natural gas and electric utility, worked with Mindgrub to develop native iOS and Android mobile apps that provide fast, secure access to services and information.
An exciting new addition to the app is a “slide to pay” option. Customers can now pay their energy bills from the home screen of their mobile devices with a swipe of a finger. The app is a seamless, friction-free way for customers to make payments.
This instant payment functionality is becoming more than a flashy new opportunity; it’s becoming an expectation. Nearly half of all user exits - regardless of device type - occur at the payment stage (46.1%, to be exact). Furthermore, four out of the top five reasons why users abandon before making a payment have to do with the logistics of entering information (username, billing or shipping address, etc.), rather than price.
Ease Equals Engagement
Offering convenient payment options through mobile devices and improved user experiences will help you establish better relationships with your customers.
It’s a virtuous cycle: show your customers that you care and they will return that love to you in spades. ♠
Give us a shout if you are considering offering mobile payment features to your customers. We’ll walk you through the details and formulate a strategy tailored to meet your needs.