Retailers With Digital Wallet Capabilities Will Win This Holiday Season: ADI

While all retailers are hoping for a record year this holiday season, the savvy ones will open wide their digital wallets for customers. Analysis by Adobe Digital Index (ADI) has found that smartphone conversion rates are much higher when retailers offer digital wallet payment options, such as PayPal, Amazon Payments, Google Wallet, or Apple Pay.

“Most retailers are initially excited about Apple Pay’s implications for the in-store environment,” explained Tamara Gaffney, principal analyst at ADI. “In-store adoption of payment technology, however, typically takes longer because it means new systems at the store. So, as Apple Pay becomes more ubiquitous, its first win could very well be online.” In fact, according to ADI, cart completion rates increase by 10% when digital wallet payment options are available.

According to ADI, 23% of purchases on smartphones use alternative payment methods, while just 16% use digital wallets across desktops and 19% use the payment option on tablets. Tyler White, an analyst at ADI, explained that digital wallet usage on mobile is higher because people find it convenient not to have to enter credit card information while on the go.

“People are also more wary of entering their credit card information on mobile devices,” White said. “They don’t feel as secure.”

According to White, ADI predicts Apple Pay will soon become the default alternative payment tool for many consumers using Apple devices because it enables easy transactions both offline and online. “Mobile conversion rates are expected to increase as digital wallets become more commonplace for online shopping,” White said.

Bridging In-Store/DigitalMobile applications are another way retailers are bridging online and in-store, and it seems to be working, with phone apps being used more than tablet apps. ADI research indicated that app usage growth on phones outpaced tablets by more than two times (70% vs. 35%).

When it comes to Android vs. iOs, Apple’s operating system represents 65% of app launches, and Android represents just 34%. The average iOS app is also used twice as long as is the average Android app per launch.

According to ADI, Apple Pay will get a bigger push into the market as more retailers add it as an option for in-app purchases as well.

Local PersonalizationAccording to Gaffney, the adoption of alternative payments options on mobile and the increased use of mobile apps in-store is phase two of an overall digitization of the retail environment. “Digital wallets are really changing the landscape for buying on mobile,” said Gaffney, “and beacons and location awareness are adding another dimension to in-store digitization.”

ADI shows high hopes for the use of location-based technology during the holidays. According to a survey of 400 U.S. consumers who own a smartphone or tablet, and plan to shop online during the holidays, 71% like having ads personalized, but opinions differ about the quality of today’s personalization efforts:

• 20% like it, but said that such ads are “not done well enough today.”
• 30% like it and said that today’s efforts are “as tailored to me as they need to be.”
• 20% said today’s personalization efforts are too intrusive.
• 29% don’t think ads should be personalized at all.

Additionally, ADI found that 34% of respondents said they have received a marketing promotion based on their locations, while another 21% were unsure. Additionally, 53% noticed retargeting efforts aimed at them. The survey also found consumers are open to beacons, with 55% finding it useful to receive promotions on their mobile devices while in a physical store.

“Beacons aren’t just changing the retail environment,” Gaffney said. “They’re being used in other venues as well, such as travel and hospitality and sports stadiums. Location awareness is coming from everywhere, since people have their phones everywhere they go.” 

ATM & NFC integration

New guide offers a comprehensive view of ATM and mobile integration

Cash isn't going anywhere. But consumers are. And increasing numbers of them are taking along a smartphone.
In fact, researchers have found that smartphone users are more likely to forget their wallet than their mobile device when they leave home. Which makes it almost inevitable that financial institutions will seek to bring together busy consumers and the cash and other banking services they need with the help of an intermediating mobile device.

Which mobile integration services do you offer?

This summer, Mobile Payments Today sister publication ATM Marketplace took a closer look at the symbiotic relationship between ATMs, smartphones, and mobile banking apps. Our surveys and detailed interviews with executives from leading financial institutions in the United States and Europe yielded a free 53-page, first-of-its-kind publication, the "ATM-Mobile Integration Guide: Strategies for successful omnichannel banking."

The guide presents findings about FIs' efforts to develop cross-channel strategies that link their ATMs with their mobile channels, their branches and Internet banking. It also identifies how the role of the ATM will evolve in the future omnichannel banking environment.
The document includes detailed survey results, as well as chapters that cover:

• key trends in cross-channel integration;
• case studies from ATM and branch innovators; and
• interviews with innovative banks.
• Sponsorship of the guide by Auriga makes it possible for ATM Marketplace and Mobile Payments Today to offer our readers a download of the entire publication at no cost.

Following is one of 17 interviews profiling many of the world's largest and most innovative banks and payment networks:

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BBVA

"ATMs will have two important roles in the future," said Manuel Crespo, Madrid, Spain-based BBVA's head of physical channels technology. "Firstly, they will absorb the majority of low-value transactions, allowing staff to perform higher-value tasks for customers. Secondly, ATMs will serve as the link between digital and physical banking channels."

Crespo believes it will be important to offer videoconferencing at ATMs, personalization of ATM interfaces from mobile devices, cardless ATM transactions, cash recycling at ATMs and ATM access via biometrics.

"Biometrics will provide an alternative to card and PIN-based transactions, allowing non-card customers to access the ATM network," he said.
For Crespo, the best cross-channel strategy is to offer the same user experience across all channels. Processes must be designed and implemented in the same way, as opposed to having different processes for each channel. This will allow customers to jump seamlessly from one channel to another, and initiate transactions on a mobile device which they complete on another channel.
"Since mobile devices play such an important role in our lives, they should be considered as the main method for authenticating payments and customer service requests," he said.
BBVA's ATMs offer the following facilities:

• customizable menus;
• personalized product advertising and offers; and
• the ability to set up alerts based on specific rules.

Currently, BBVA offers the following mobile integration services at its ATMs:

• cardless ATM transactions involving NFC-enabled mobile devices;
• cardless ATM transactions using a one-time authentication code;
• locating the nearest using mobile devices; and
• withdrawals of cash received via mobile P2P fund transfers.

BBVA plans to roll out cardless ATM transactions from mobile wallets using QR codes by the end of 2014, and is developing the following services:

• allowing customers to use their mobile deice to customize their own ATM menu; and
• offering a real-time view on a mobile device of services on the selected ATM.

Based on its U.S. subsidiary BBVA Compass' drive-thru ATM video conferencing services, BBVA is working on a proof of concept for video-conferencing at its Spanish ATMs, Crespo said. Following the 2013 launch of assisted self-service banking terminals at its flagship branch of the future in Spain, BBVA plans to roll out assisted self-service technology in its other branches.