A hover of the smartwatch and the payment is done. A quick tap on the mobile app and the purchase is authorized. An instant sync and customer loyalty points are up-to-date and ready to use. Digital gift cards, plane tickets, passports, and access keys….
This is mobile wallet technology in action. What started as an early-adopter technology in 2015 has boomed into the de facto payment and e-commerce standard. Customers crave the simplicity and convenience. Merchants appreciate how easy it is for customers to pay without ever tapping on a keyboard.
Mobile wallets are here to stay. Now is the time to learn the facts on mobile wallets and get ready for the next big wave in omnichannel payments.
What is a mobile wallet?
A mobile wallet allows customers to make purchases without ever taking their credit or debit card out of their physical wallet. Using an app on their smartphone, tablet, or smartwatch, customers have the freedom to pay in digital form.
To make in-store purchases, customers hover their smart device over the payment terminal and the payment is authenticated and authorized. Customers can make in-app purchases without entering their payment details. Additionally, customers can receive brand and store offers and loyalty points directly to their digital devices.
Customers are drawn to mobile wallets for one primary reason: convenience. The key for merchants is in delivering on this convenience when customers are ready to pay. This means supporting a wide range of mobile wallet options and paying attention to customer demand for mobile wallet options.
Some of the most popular mobile wallets include: PayPal, Apple Pay, Samsung Pay, and Android Pay. However, merchants are wise to pay attention to mobile wallet trends and monitor which mobile wallets are rising in popularity.
It’s important to remember that mobile wallets also include: digital coupons, gift cards, digital tickets (for events or transportation), identity cards such as digital passports, and digital access keys for buildings and homes.
How can merchants leverage use of mobile wallets?
Merchants who support mobile wallets are able to position themselves strongly in the m-commerce and CNP markets. Customers want seamless, frictionless payment options – this is easily delivered with mobile wallet provider support.
Along with providing customers the ease-of-use they want, overall fraud risk is reduced with the inherent technologies within mobile wallets. This all adds up to big pluses for customers who have to choose between a merchant who does accept mobile wallet payment and one that doesn’t – ease-of-use and security are huge factors in decision-making.
One of the best ways that merchants can take advantage of the benefits of mobile wallets is by providing a consistent omnichannel m-commerce experience. By providing an app and website that has the same look-and-feel, customers automatically feel comfortable with the payment process.
Merchants would be wise to take advantage of the built-in convenience this payment technology provides them – allowing them to easily connect mobile wallets, apps, digital gift cards, and loyalty programs. This allows customers to take advantage of smart device payment options, and enables them continue to benefit from merchant loyalty programs and sales.
The easier it is for your customers to spend their money in your store (brick-and-mortar or digital), the more money yours customers will spend. Customers have come to experience a note of inconvenience when getting to the final checkout step and discovering that the merchant does not accept their preferred payment method.
Merchants should remember the value of having a payment gateway that allows you to leverage customer insights and additional engagement opportunities that can lead to long-term revenue increases.
What should merchants do to prevent mobile wallet fraud?
Mobile wallet technology is inherently more secure than other payment options. This security comes from the built-in tokenization that supports instant authorization and authentication in milliseconds.
Tokenization replaces sensitive account and card information with a non-sensitive token or placeholder. This token is used as an identifier during the payment process. This token can only be traced back to the original account or card data with a master key as part of the tokenization system.
These tokens are created by a Token Service and are issued to the customer’s device by the Token Issuance process. This keeps the entire tokenization process secure and impossible to reverse engineer.
Tokenization is used to secure mobile wallet and m-commerce payments and to secure Tap & Go payments, in-app purchases, and in-app virtual purchases.
While tokenization does not guarantee merchants will be protected from security breaches, it does guarantee that vital customer data is protected in the event of security breach.
It is still important that merchants implement a multi-layered fraud protection solution that provides them extended protection that tokenization cannot provide. Contact us to learn more about device authentication, 2-factor authentication, and geolocation.
How can I learn more about mobile wallets?
For many merchants, mobile wallets technology can seem overwhelming, but the good news is that the benefits to mobile wallets outweigh the barrier to entry. Use the following Verifi resources to learn more about mobile wallets:
- Mobile Wallets & the Evolution of Loyalty
- The Facts on Mobile Payment Fraud
- Super Gateway Provides Safe, Secure Payment Processing from End-to-End
- Payment Evolution and the Omnichannel
Browse the Resources section to learn more about mobile wallets, fraud prevention, and omnichannel sales.