Contactless payments are fast becoming the new normal, eliminating the need to carry a wallet entirely.
Using your smartphone to pay for goods and services, either in-store or online, is predicted to overtake credit card use by 2021 based on a survey of over 1000 Australians conducted earlier this year.
Purchases from digital wallets on a global scale are expected to reach US$647 billion in 2019, an increase of 67% on the previous year. New research from Westpac has revealed Australia’s smartphone users expect 90% of us to be cash free by 2027.
Most recently, Apple was pipped to the post when Google announced a deal with numerous banks including ANZ, Westpac, St George, ING Direct and Macquarie Bank to launch Android Pay in early 2016. Despite its partnership with American Express, Apple will soon make a new offer to Australian banks.
The winners of the digital wallet war will need to provide a second-to-none customer experience going forward, underpinned by convenience, reach and scale, omni-channels, security, personalisation and loyalty.
Not needing to enter card security details repeatedly is one of the biggest sellers for customers in adopting the technology. Winning the digital wallet war calls for a collaborative, highly scalable approach.
Ultimately, consumers will want a payment method that can be used in most places. At the moment, there’s no one application accepted everywhere. Collaborative relationships will be essential in gaining the competitive edge.
People want to use digital wallets across all environments; in-store, online and in-app. For players in this space, the ability to connect with customers across multiple touch points has become a matter of survival.
Many consumers still have security concerns when it comes to non-card payments. Digital wallets do possess a physical level of security in that smartphones require a pin to unlock the device. Banking details are also heavily encrypted by digital wallet applications. But as with all online transactions, there’s still the threat of cyber-security. The likes of Apple Pay and Android Pay will need to assure consumers their digital wallet platforms are up to the challenge.
As loyalty becomes more digital, mobile technology has a large part to play in whether customers stick. For retailers, loyalty schemes and delivery preferences should be updated automatically, and in real-time. Personalised strategies, combined with loyalty rewards, will differentiate the winners and losers in the digital wallet war.
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