Originally published in collaboration with Teradata on the Teradata blog.
Here are a few eye-opening stats: 91 percent of Americans have a mobile phone, and 82 percent have their phone with them 24 hours a day, seven days a week. What’s more, a recent survey found that mobile phone users now spend 33 percent of their media time on their phones, compared to 25 percent spent on television. Think about that for a minute. According to those poll results, today’s consumers are interacting more with their phones than they are with their televisions. Clearly, a tidal shift towards always-on connectivity in the palm of consumers’ hands is underway, and it’s picking up steam.
As the mobile phone becomes increasingly ubiquitous and convenient, consumer buying habits are also becoming more and more phone-centric –thanks in large part to the growing trend of mobile payment.
What exactly is mobile payment? It’s an emerging method of digital payment, joining the familiar cash, check and credit card. So, instead of fumbling through pockets for another nickel to make exact change, consumers will be able to use their phones to complete a purchase, the perfect marriage between convenience and technology.
In fact, the demand for mobile payment options has been so high among consumers that PayPal is working to bridge the gap in retailer adoption by allowing customers to charge their accounts directly using a new triangular card reader, called PayPal Here.
What does all this mean for marketers? Let’s take a look at three key ideas that you need to keep top of mind while considering mobile payments.
1. Discounts and promotions can apply automatically.
With the touch of a button or swipe of a finger, mobile e-consumers can purchase anything, from anywhere, at anytime. The global marketplace is literally in the palm of their hands (or, at least, in their pockets). What marketing potential does this provide?
For starters, you can lure customers with discounts and promotions that apply automatically. Last fall, Google Wallet helped guide people to two dollar smoothies. Other companies are jumping onto the bandwagon, with retailers like American Eagle, Office Max, and Toys ‘R’ Us offering discounts to shoppers using the Google Wallet app.
Who knows? Purchases motivated by mobile payment discounts may become the 21st century version of the impulse buy. My prediction is that businesses will begin to partner with credit card companies to offer mobile discounts See Chase’s email below for an example of some personalized offers already in effect:
2. Technology empowers both consumers and marketers.
I love this quote from the Girl Scouts of America, which announced earlier this month that Girl Scout troops in 23 States are now accepting mobile payments.
“We want to give members real-world skills and applications they’ll carry with them as they become adults,” said Carol Smith, a leader of Girl Scout Troop 24 in Solon, Ohio. “Using Sage Mobile Payments is a great way for our girls to use technology to sell additional boxes of cookies. This is an example of something we teach our girls; using technology is a way to empower themselves.”
Just as technology empowers consumers, it empowers marketers, too. Mobile payment offers new ways to reach and engage customers with communication that’s relevant and personalized. Plus, you’ll be able to better track responses and measure success, potentially in real-time.
3. Credit cards and cash aren’t going anywhere yet; we’re in a transition period.
As powerful as mobile payments are, plastic and cash aren’t going to disappear anytime soon. Transitory services like Square (created by Twitter co-founder Jack Dorsey) offer a comfortable middle ground. Plug a square-shaped credit card reader into your iPhone, iPod Touch, or iPad and you can take credit card purchases with the same convenience of mobile payment.
Why the transition period? Comfort. Customers are accustomed to paying with cash or credit card. (Checks have become less and less a factor, especially with the rise of debit cards). A study found that even in 2011, 46 percent of people refused to do their Christmas shopping online (for a variety of reasons).
Square is like introducing a menu of complicated cuisine to customers accustomed to simple meat and potatoes; it’s probably best to meet them halfway to gourmet. While consumers may not be quite ready to make the full dive into digital currency, technologies like Square introduce the concept of mobile payments and will help buyers evolve towards more advanced digital payment methods.
There’s no doubt about it: Big changes are on the way. Mobile technology has shaped everything from how we communicate to how we spend our free time. It only makes sense that consumer buying habits will be the next to transform.
Of course, we still have a long way to go. Remember George Costanza’s wallet from Seinfeld? It was his “organizer, memory and good friend.” It will take some time for consumers to say goodbye to their “good friends,” but if 82 percent of Americans now have their phone with them at all times, they may have already met their new best friend without even realizing it. Mobile payments will become key to small businesses and with the advantages they provide, especially in the realm of location based and immediate offers, savvy marketers will be ready.