Regardless of the technology used to enable mobile payments, financial institutions and network card providers are still in prime position for offering a digital wallet solution, each by more than one-third of all consumers surveyed by Vantiv.
Next in line comes PayPal, which represents 10% of the vote, with other name brand candidates like Amazon, Apple, and Google still trailing at 5%, 4%, and 2%, respectively.
According to the Vantiv Omnicommerce Tracker report powered by PYMNTS.com, the key issues revolve around data privacy, security, fraud protection, and who consumers trust to manage their financial information.
In spite of some of the mobile payments inroads being made in fast food locations by major players like Starbucks, the report says consumers increasingly prefer to use traditional credit payment forms (39% up from 35% in 2013) and prefer cash as often as debit cards, both are preferred by 1 in 5 consumers surveyed, down from 1 in 4 in 2013. And although roughly 1 in 10 consumers expect to be using mobile payments for restaurant visits in five years, that number was still down by 4% overall, and down 10% for both young consumers and smart phone owners.
Nearly 2 in 5 consumers are interested in using the restaurants’ mobile device (tablet or phone) to order or pay when dining in, especially young adults (48% interested in both) and smartphone and tablet owners (49% interested in paying the bill and 45% are interested in ordering).
What’s more, it appears that mobile may be supplanting on-line ordering, particularly in the category of pre-ordering for in-house dining.
“As restaurant owners and service providers look for ways to entice consumers to migrate toward mobile ordering and payment methods, they should consider using the same types of incentives credit card companies have been using for years−discounts and rewards,” the report says.
In fact, 44% of consumers state they would switch their current preferred payment type if they were to receive a discount on a purchase for using another payment type, especially young adults (51%), tablet owners (52%), smartphone and tablet owners (54%), and those earning $100K+(53%).
Consumers are already adept at using mobile technologies and are increasingly willing to incorporate these into their shopping habits, particularly as they relate to using merchant tablets to check product details, availability, pricing and ordering, mentioned by 2 in 5 consumers, especially young adults (1 in two are interested).
Encountering an inconsistent user experience or “look and feel” on the retailer website is a problem commonly cited by young adults and those who own both smartphones and tablets (60%). Inconsistencies across product inventories and pricing are also commonly noted by younger adults in particular, who tend to shop more using both online and mobile channels.
Not having access to relevant special promotions is the most common difficulty experienced online (51%), particularly by young adults who are more likely to shop online (57%), the report shows.
What’s more, 43% of consumers who say they use their phones to shop online in-store also use their phones an average of 11 minutes to aid them in shopping. For retailers, data on consumer in-store and mobile behavior can be used to offer discounts, coupons, and promotions to spark spending.
“Engagement, particularly through various social media platforms and new technologies, has become key to driving customers to buy more in physical stores,” the report says.
More retailers have started to adopt such mobile and social strategies to engage with and reward customers, the report shows:
To engage customers, Coca-Cola’s launched digital extension of its “Share a Coke” campaign called “Tweet-a-Coke,” allowing users to send soft drinks for $5 to friends by using the handle @TweetACoke, the word “enjoy” and their friend’s Twitter handle
To enable customers, Starbucks announced plans to allow consumers in one undisclosed geographic test market to start placing pickup orders from the Starbucks app later this year, allowing users to make and pay for coffee and food orders via smart phone before arriving to a shop
To serve customers, some online retailers like Bonobos are adding more physical locations. Bonobos’ “Guideshop” store locations serve as mini showrooms where “guides” serve customers before they make purchases from the company’s website.