How AI and analytics can help enterprises to increase adoption and usage of mobile wallets?
By : Flytxt
With the advent of the increasingly digital lifestyle, smartphones have become an indispensable part of a majority of people’s day to day activities. They have already replaced our alarm clocks, phonebooks, calculators, cameras and what not? Are we ready to let the smartphones replace the content of our wallets as well?
According to a 2017 report by Forrester Consulting for JPMorgan Chase, merchants and consumers in US believe that digital wallet adoption will grow in the future. About 41% of consumers said that they will likely sign up for an e-wallet in the next 12 months, while 55% of merchants said that they will likely accept e-wallet payments in the next 12 months.
Adoption of wallet is still slow
Mobile wallets offer strong benefits for consumers and enterprises alike. Consumers can make instant payments from anywhere and at any time, automatically redeem offers and make safer transactions. On the other hand, enterprises can get an edge over the competitors by providing enhanced customer experiences by leveraging mobile wallets as perfect tools for customer engagement and customer loyalty. Mobile wallets are convenient and provide an ease of developing micro-services attached to digital payments which in turn increases the scope of generating more revenue. This explains why an increasing number of retailers, entertainment businesses, consumer brands, etc. are providing their own wallets (e.g. Starbucks, Target, Walmart, etc.).
Though users are becoming more aware of wallets and its benefits, adoption rate is still slower because of multiple reasons – security & privacy concerns, slow merchant adoption, etc. It is a chicken-egg situation, where consumers are not adopting wallets because of non-uniform merchant support. Merchants are not supporting mobiles wallets because consumers are not demanding it. In this article, we’ll see how AI and analytics can help enterprises to increase adoption and usage of mobile wallets.
Driving adoption and usage of mobile wallets
Most millennial own a smartphone and engage with their phones most often. According to a June survey by Bank of America, more than one in three millennial (39%) engage with their smartphone more than “anything else”. So, it becomes imperative for businesses to adopt a strategy to leverage customer analytics to understand their digital purchase behavior and interactions so as to drive adoption of mobile wallets:
Identify right customers to offer mobile wallet
With an increasing number of interactions and conversations with customers shifting to digital channels, enterprises have access to a plethora of real-time customer information.
With predictive analytics techniques, enterprises can make out ‘digital savvy’ customers who are likely to transact and purchase more on their digital touch points like mobile app. These customers can be targeted with specific mobile wallet offers for increasing adoption. Similarly customers who spend higher on recharge and data are again likely target segments for cross-selling mobile wallet service.
Moreover, customers will move out of their comfort zone of paying through conventional methods only if the new method gives them some added value or savings. This can be achieved by providing personalized discounts, coupons or loyalty points.
Identify right moments to drive mobile wallet usage
Mobile wallet transactions and digital interactions can be analyzed using machine learning and AI-based techniques to understand customer’s affinity for lifestyle products and services. They can run targeted campaigns to entice customers to spend more on similar products and services using their mobile wallet. For example target ‘music lovers’ and give special discounts to them on download of music albums if they pay with mobile wallet. Enterprises can use machine learning techniques to personalize offers for every customer as per their historical purchase behavior and current context. These offers will drive higher wallet usage and revenue uplift.
Retain your wallet customers
Always keep monitoring mobile wallet usage of customers to identify those who are likely to churn or who are not actively using mobile wallet. Design specific campaigns to stimulate the wallet usage giving them special offers again fitting their historical usage behavior and digital lifestyle needs.
Get up to speed with the future of payments
Whether we like it or not mobile wallets are the current technology of future pay. As more and more independent brands start offering their own wallets, enterprises must take steps to ensure adoption through effective marketing. For instance, the focus should not just be on devising offers/discounts for different segments of people, but ensuring that they receive the reminders across right channels and at the right time that will improve their chances of conversion. With the improving technology, consumers will expect a lot more than just convenience from their mobile payments. Hence, for businesses, success will be dependent on the effective integration of value-added components which will drive more customer engagement and increase the wallet adoption rate.