Android Pay moves in to mobile banking
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Android Pay announced integrations within mobile banking apps of Bank of America, Bank of New Zealand, Discover, mBank, and USAA, according to a Google blog post.
The upgrade will allow mobile banking users to easily enroll cards into Android pay with one tap in the banking app, thereby avoiding the hassle of manually inputting or scanning card information. Furthermore, at select banks, users will be able to pay with Android Pay in stores and online without without having to ever even download the Android Pay app.
Bank partnerships are designed to grow Android Pay adoption by soothing security concerns.
- Android Pay needs to jumpstart sputtering adoption. Despite being first-to-market with a mobile wallet among the phone technology providers, Google has failed to attract users to its wallets. Today, Android Pay has two-thirds the users of Samsung Pay and about one quarter the users of Apple Pay, according to 2017 research by Juniper.
- Cobranding with banks could build trust and ultimately adoption. Although shrinking, security concerns remain the second largest reason users shy from Android Pay, after satisfaction with current payment methods, according to a 2017 PYMNTS survey. Integrating Android Pay within mobile banking apps, which users trust to safeguard their most sensitive data — 75% of customers trust their banks most to provide a mobile wallet — could carry over confidence to Android Pay.
Banks stand to gain by luring tech-hungry customers with a flashy feature. More customers are switching banks for superior digital banking features — driving banks to invest in advanced features like mobile wallets. Google said other banks would soon join the five initial partners in supporting the feature. If Android Pay’s partnerships succeed, it’s conceivable that Samsung Pay may follow suit. But it would be surprising for Apple Pay to partner with banks, given its historical pursuit of end-to-end control over user experiences.
Retailers like Starbucks and Dunkin’ Donuts are winning over consumers with their mobile wallets — apps developed by stores to make it easier for their customers to pay, and to deliver valuable perks.
And these retailer wallets are leading the overall mobile wallets industry, thanks to their ability to rapidly push out innovative features like rewards programs, coupons, mobile order-ahead, and custom marketing.
This may be surprising considering that retailer mobile wallets can be used only at a specific retailer’s locations; in contrast, popular universal mobile wallets like Apple Pay and Samsung Pay can be used at multiple retailers, as long as users are using the necessary smartphones.
Ayoub Aouad, research analyst for BI Intelligence, Business Insider’s premium research service, has compiled a detailed report on retailer mobile wallets that assesses what makes them so successful and which retailers can most effectively leverage the technology to push sales, traffic, and average ticket size. The report also outlines what makes these mobile wallets attractive, and discusses some of the advancements being made in the payments industry that will affect mobile wallets’ growth rate.
Here are some key takeaways from the report:
- Retailers with large addressable user bases who are loyal, repeat visitors, will see their mobile wallets continue to be popular with consumers, especially as there continues to be slow merchant adoption of near-field communication (NFC) technology as well as weak offerings by universal mobile wallets like Apple Pay and Samsung Pay.
- Loyalty programs will be a significant driver in retailer mobile wallet adoption. Companies like Starbucks and Dunkin’ Donuts have been able to leverage their loyalty programs to acquire mobile wallet users, which, in turn, has driven store traffic and conversion rates.
- By leveraging these programs, sales are expected to grow at a five-year compound annual growth rate of 68%.
- However, adoption will begin to decelerate as a result of increased competition by 2020. As universal mobile wallet players begin to add effective loyalty programs and coupons to their offerings, adoption for retailer-based mobile wallets is likely to slow down because these offerings are their main marketing points.
In full, the report:
- Explains what hurdles universal mobile wallets have faced.
- Details what features retailers have adopted into their mobile wallets that have been successful
- Analyzes the use cases of retailers that have successfully leveraged their mobile wallet offerings to push growth.
- Identifies how universal mobile wallets will eventually slow growth for retailer-based mobile wallets.
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