It’s a more convenient way of sending cash
MOBILE wallets may offer some convenience, but until they offer a broad range of simple, seamless transaction capabilities, and give users more value than that of their cash alone, they will still lack consumer “stickiness”.
This is according to Kobus du Plooy, the chief executive of transactional software specialists Celbux, who notes that mobile wallet adoption has not reached its full potential, often due to a less-than-optimal consumer use case.
The most common use case for mobile wallets has been remittance, and this is what has driven rapid adoption in some areas – particularly where unbanked consumers have embraced a cheaper and more convenient way of sending cash. But in markets where a mobile wallet needs to be multifunctional. Perhaps the consumer can transfer money and pay certain utility bills using the mobile wallet, but if there are other accounts and merchants who don’t accept payment via the mobile wallet, the consumer still has to have a traditional bank account too,” says Du Plooy.
“The consumer then questions why they should go to the trouble of loading the mobile wallet, and pay fees for using it, while they also have a traditional bank account offering the same benefits and possibly greater convenience.”
Integration at a higher level across all merchants would support the ability for the consumer to use a single mobile wallet to pay for all goods and services. “For the consumer, the ability to simply pay any merchant or individual starts making a mobile wallet as good as a bank account,” he says.
But cost is another factor in achieving mobile wallet stickiness, he notes. “If the mobile wallet is cheaper than a traditional account, but offers the same or more functionality, consumers will start migrating.”
Added to this, if the mobile wallet gives consumers value greater than that of their cash, the mobile wallet becomes a compelling proposition.
“Cash in a consumer’s pocket is convenient, but its value stays static, whereas cash in a mobile wallet can potentially offer greater value in the form of loyalty, incentives and discounts,” Du Plooy says. | Celbux