Recent reports have indicated that mobile wallets are starting to make a large impact on eCommerce payments, with Gen Z being the biggest fans of the new technology.
In a recent whitepaper , published by PaySafe , it was found that ‘Generation Z’ seeks a wider range of payment options than past generations, with mobile wallets being much more popular with the demographic than other groups. The research tells us that 40% of Gen Z, which includes people born between 1995 and 2005, have some experience using in-app payments like Google Pay, Revolut, and even Facebook Messenger. This is a much greater number than the 27% of all other consumers who said they have used such apps. 15% of Gen Z’ers said that they use an app or apps of their choice on a regular basis as their payment method, which is higher than all other consumers, as only 9% said they regularly use these payment methods.
According to Payper’s , the convenience of Mobile Wallets lies in the fact that it speeds up the payment process significantly, as customers don’t have to go through multiple pages to process the order, as is the case with most mobile eCommerce payments. Given that mobile commerce is growing at such a fast rate (In 2017 it made up 48% of eCommerce sales), any product that can speed up that process should be of interest to all parties involved in eCommerce of any kind.
As positive as the statistics that have come from the PaySafe whitepaper are, there are still problems that are holding back non-Gen Z demographics. For many, the fear of losing money through online fraud or cyber-attacks makes them wary of technology like mobile wallets. Educating consumers is the best way to deal with this, and should be a focus of the marketing communications from services like Revolut. Most of the apps or software use encryption and tokenization to make payments safer, and this should be explained to consumers, especially those who are more cautious and take longer to adapt to new technology.
As well as looking at mobile payments, the report – which surveyed over 6,000 consumers from a range of locations, like the UK, Canada, US, Germany, Austria, and Bulgaria – also dived into customer views on in-store payments. Similarly, the Gen Z group said they preferred having plenty of payment options in brick and mortar stores. The majority of people favored shops that offer contactless payments over shops that don’t. Physical cash, although becoming less popular, is still used by 73% of this demographic in physical stores.
Voice-activated payments were also discussed in the report. Over half of 16-24-year-olds said they would be happy to use a voice-activated payment system for a subscription service, while 51% said they would do the same for a one-off entertainment purchase. When it came down to things like groceries, 43% of the group said they would pay with their voice, if it were done via voice commands with a smart fridge.
SME’s working in the online payment space are growing rapidly. Irish company Prepaid Financial Services just announced its expansion plan, with a €50 Million investment in creating a FinTech hub that will be based in Trim, Co. Meath. The firm, who specialize in Mobile Wallets, physical cards, and IBAN services, will also hire an additional 50 new employees.
Large corporations are also rapidly expanding in the FinTech space. Visa just announced that they plan to grow their highly productive partnership with Revolut, by bringing Revolut to a further 5 regions, which includes 24 new markets – meaning Revolut will now be operating in a total of 56 markets. Visa’s CPO Jack Forestell tol retail publication PYMNTS.com “Visa is taking an active role in working with FinTechs and emerging players who are entering the payments ecosystem at a rapid pace.” Forestell went on to say that Visa’s huge global presence would do much to assist not only Revolut’s expansion but also their knowledge of local markets and by providing their own expertise and research in the area. This should allow them to move into the markets quickly, with much fewer barriers to entry.
Tap & Go
One of the biggest enablers of the eWallet growth has been the introduction of Near Field Communication (NFC), which allows devices to exchange information with terminals like a card machine by a simple tap. This ‘Tap & Go’ technology has been adopted by most major issuers of physical cards and mobile wallets, with consumers and retailers alike enjoying the speed and convenience the technology offers. To demonstrate how popular this technology has become – in 2016, NFC was responsible for $75 Billion worth of transactions. By 2020, the figure is expected to grow to $500 Billion.
It seems then that Mobile Wallets offer significant benefits to consumers, in both speed and ease of use. The expansion of a company like Revolut will only serve to bring the technology to more and more people, normalizing the use of Mobile Wallets on a global scale. eCommerce companies can expect this to be one of the most popular payment methods going forward, and must assure they are well equipped to handle these systems, especially with PSD2 looming.
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