Mobile wallets set to dominate payments

Mobile wallets set to dominate payments https://wahospitality.org/wp-content/uploads/2020/09/contactless_mobile_payments.jpg

There are few moments like now where American consumers are collectively open to the idea of new payment methods – especially contactless ones such as mobile wallets. This is good news for businesses since mobile wallets offer a safer payment alternative to credit cards and drastically reduce customer wait times at checkout.

Mobile wallets (such as Apple Pay and Pay Pal) use authentication, monitoring and data encryption to secure and transmit personal information, and the level of security associated with them has payment card issuers backing their use. This is certainly helping drive consumer adoption, as does convenience.

In fact, global mobile wallet transaction value is estimated to reach nearly $14 trillion by 20201 – and that is a pre-COVID-19 estimate. New estimates are higher and point to further rapid adoption given the current need for touch-free payment options. According to a recently published Visa Back to Business report,* 70 percent of consumers surveyed in June 2020 have used a new shopping or payment method for the first time this year.

A rapid shift has begun and the numbers tell the story
So what is holding back business adoption of mobile wallets? Until recently, it just wasn’t a priority for many small- and medium-size businesses to enable it or educate their employees on its use. The lack of preferential demand didn’t make it a pressing topic. But that is changing. Consider this:

  • According to Forbes,2 by 2026, digital natives will be 59 percent of the consumers in the U.S. market.
  • Of this, 45 percent will be specifically Millennials and Gen Z, representing the largest purchasing power.
  • As Gen Z move into becoming the largest generation cohort, their purchasing power will be $143 billion. But it’s not just what lies ahead that SMBs should be focused on now.

According to Visa’s Back to Business report, shoppers are now putting COVID-19 safety measures at the top of their shopping lists and they will reward stores that do the same. In fact, if all other factors were equal (price, selection, location), nearly 63 percent of consumers surveyed would switch to a new store that installed contactless payment options, such as mobile wallets.3

Accepting payments from smart technology-enabled accessories has never been easier with the help of a payments partner dedicated to bringing the latest mobile experience to life. Submit a quote to our Washington Hospitality Association Payment Processing Program, and find out how we can help you get started with contactless payments and more.

1Payments Industry Intelligence, “The rise of digital and mobile wallet: Global usage statistics from 2018,” November 25, 2018.
2Forbes, January 2020
3Visa Back to Business report 2020

This article was originally published in Elavon’s Payment Smart newsletter. The Washington Hospitality Association’s payments processing system is backed by U.S. Bank/Elavon.