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Is the mobile payments tide turning?

Science fiction author William Gibson once noted (to paraphrase) that the future is already here - it just isn't evenly distributed yet. For a case study in this reality, take mobile payments. Despite the dumptrucks full of money diverted by device manufacturers, card issuers, and retailers into driving mobile payment adoption, consumers have yet to adopt mobile payments in large numbers, even though the vast majority of them have the ability to do so. The exception: Millennials (remember them?), who are already providing a glimpse of the mobile future.

By Rick Ferguson


Thepaypers.com has the stats to back up this premise. From a recent Business Insider Intelligence survey, they report that 90% of Millennials polled have made a purchase on their smartphone, while 44.5% have made a recent in-store purchase.

Meanwhile, a survey from Vantiv and Socratic Technologies reveals that, while one-third of Millennials surveyed won't participate in loyalty programs because of the requirement to carry plastic cards, 20% would participate via mobile wallet. Another survey from TSG reveales that 37% of Millennials are "extremely willing" to have their purchases tracked by trusted merchants - a number 24% higher than the number of Baby Boomers willing to do so.

How can brands harness this willingness to adopt mobile payments and loyalty? By creating a frictionless experience. Money quote from The Paypers:

"Some restaurant operators are having success with loyalty programs that deliver digital coupons to consumers' phones when they enter the restaurant, or even the restaurant's vicinity. Consumers who pass a coffee shop and simultaneously get a discount offer on something they often buy are much more likely to end up visiting the store and buying the item.

"Then, its also pays to close the loop on that by offering convenient payment that involves nothing more than the diner handing his or her phone to the cashier to scan or tap to a near-field communication terminal. Operators who institute this sort of program are capturing millennial consumers and affirming payment trends in ways that the whole population will soon adopt."

The question remains: will mobile payments reach critical mass organically, as Millennials and their younger counterparts, who view their smartphones as extensions of their physical bodies, slowly supplant those Luddite Baby Boomers in the marketplace? Or will mobile payments continue to be a solution in search of a problem? These numbers perhaps suggest the former. If so, the winners in the new mobile wars will be those brands who leverage mobile in the service of building long-term relationships with their best customers.

Rick Ferguson is CEO and Editor in Chief of the Wise Marketer Group.