What’s in Your Customer’s Wallet?
With retail in 2019, it's innovate or get left behind. Merchants must compete to win the business of consumers more than ever before. In this push-and-pull landscape that will only intensify, consumers are demanding more personalized shopping experiences and further asserting their purchase preferences. One trend that has bubbled to the surface is the move towards digital payments. In fact, just last year eWallet transactions nearly surpassed debit card payments in the U.S. (20 percent and 21 percent, respectively), according to a recent Retail Global Payments Report from FIS. From Apple Pay, Google Pay, Amazon Pay, and Alipay, eWallets are simply no longer a nice-to-have for online retailers, but rather a must-have for those hoping to do business online. With this trend on the upswing, retailers must adapt to prepare for the payments of tomorrow.
The Mobile Revolution
The trend towards mobile is fueling the proliferation of mobile and digital wallets both online and at the point of sale. According to FIS, eWallets accounted for 37 percent of retail e-commerce transactions globally in 2018. eWallets are making a name in the payments world as true industry disruptors, redefining the landscape of retail in less than a generation. But what does this mean for retailers? Finding the right mix of digital payment offerings will be more important than ever. This rise in popularity gives retailers the opportunity to customize their mobile payment offerings based on the preferences of their target audience, enticing their customer base to keep coming back.
Retailers Reaping the Benefits
Thanks to the authentication security and tokenization deployed by eWallet providers, paying by digital wallet is safer than other payment methods. This is good news for retailers in an age when security and data privacy are top of mind for consumers.
As more retailers offer eWallets as a payment option, not only will their customers’ shopping experiences improve, the likelihood of repeat business will dramatically increase. Consumers can pre-load their wallets with value and simply enter a password or fingerprint to purchase. This also makes it easy for merchants to give their customers a quick and seamless purchasing process, reducing queues and potential drop-outs, which is especially important to high-volume businesses.
But Don’t Forget …
From ease of use to capturing a growing consumer base, there’s no denying that eWallets are here to stay. However, it’s important for retailers to be aware of the reasons consumers may not make the switch. FIS’ U.S. Consumer Behavior Report suggests that 63 percent of consumers are concerned about security issues, 36 percent see no tangible benefit in switching, and 25 percent don’t always carry a smartphone. For eWallets to continue their rise, it's important for merchants and other industry players to continue to educate the market on the many ways eWallets improve the day-to-day lives of consumers.
The Future of eWallets
Although credit and debit cards are still the leading payment methods for U.S. shoppers, eWallets are the fastest growing payment method across the world and will continue to gain popularity in the future, according to FIS. In fact, FIS data indicates eWallets are expected to account for 46 percent of global payments by 2021. Retailers have the opportunity to retain customers with real-time payment innovations as this sector evolves. Soon enough, as retailers seek to accommodate consumer preferences, they'll be asking, “What's in your wallet?”
To download the full FIS Retail Global Payments Report, click here.
Casey Bullock is general manager for North America, global e-commerce, merchant solutions at Worldpay from FIS, a global payments company.
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