Picture this: A future where it will no longer be necessary to carry a wallet to go shopping. There will be no more cash, checks, or credit cards needed to make a purchase. Instead, shoppers will make all purchases via their smartphone devices. With mobile wallets on the rise, this could very well be the scenario in the not so distant future.
As mobile wallets continue to gain popularity, here are 3 reasons why 2016 will be the year for mobile commerce.
1. Top Tech Companies Involved
Many of the top tech organizations are involved with the rising trend of mobile wallets, including Apple, Google, and Samsung. Since 2014, each of these major tech companies has created their own mobile wallet, available on a wide variety of smartphones.
By the end of 2015, Apple anticipates Apple Pay will be accepted at 1.5 million locations. Google released Android Pay in September and announced it will be accepted at over 700,000 stores and in 1,000 mobile apps. Likewise, Samsung Pay was released in September and is expected to be available at over 30 million merchants.
“These companies are creating a buzz, and that will help educate retailers and customers about the value and ease of mobile payments and popularize the concept,” spoke Mike McGuire, Gartner research vice president.
Several other tech companies are also trying to get involved with creating payment features. Microsoft announced they are creating “Microsoft Payments” and are looking to join in on payment platforms. Facebook has also come out with a payments feature for their Messenger app that allows Facebook friends to send each other money via the app and a debit card that is linked to their account.
With all of the top technology companies involved on expanding mobile wallets, this will mean that millions of smartphones will be incorporated with apps and features applicable for mobile payments.
2. Merchants Will Be Upgrading Tech to EMV
EMV is now in effect in the U.S. and merchants who still have not upgraded to EMV-compliant terminals will be fully liable for counterfeit fraud transactions. Over the next several months, more merchants will begin to upgrade their technology to not only meet EMV requirements, but to also take advantage of Near Field Communication (NFC) technology which supports mobile payment acceptance.
"Some sectors will migrate more quickly than others to accepting mobile payments and promoting mobile commerce. However, new credit card standards will cause a shift in liability for fraudulent transactions in 2015, requiring retailers to update their point-of-sale systems for safer credit card transactions. This opens the door for point-of-sale updates to also accept mobile payment,” said Jennifer Polk, research director at Gartner.
3. Deals Are Going Digital
As merchants continue to embrace mobile wallets, there will be a shift in coupons, deals, and loyalty programs going digital as well. One specific generation that has grasped using digital deals is the millennials. Millennials vary from past generations, such as Baby Boomers, in the respect that they are more likely to use their smartphone for discounts and for shopping. A study from Synchrony Financial showed that 62 percent of millennials responded to discounts that were sent to their smartphones, compared to only 39 percent of baby boomers.
“Mobile wallets are an opportunity for marketers to engage with customers in real time. If you opt in, they can push a coupon and create a direct relationship and offer a seamless way to purchase right from their mobile device,” said McGuire.
All in all, mobile wallets will continue to become more prevalent for every day purchases. With the top technology companies each gearing up with a mobile wallet, EMV and NFC compatible terminals will be in a higher demand, and deals are now going more digital, 2016 is expected to be a prime year for the rise of mobile wallets.