Savvy merchants such as OpenTable and SeaWorld are overcoming the challenge of getting consumers to adopt a mobile wallet by offering points or differentiated rewards only available for mobile wallet users.

In the United States as well as other markets, mobile wallets have yet to take off in a meaningful manner, mainly because the wallet providers are struggling to create added value that appeals to customers against traditional payment schemes like credit cards. Also, companies in the U.S. have been slow to assemble a critical mass of participants across the mobile wallet ecosystem to make the wallets a real consumer alternative.

“The single most important question anyone looking at mobile wallets needs to ask is ‘How is this better than the old way?’ said Ritesh Bhavnani, founder and chairman at Snipp Interactive Inc., Washington. “If you’re significantly improving the customer experience or creating significant customer value for those using the wallet, then adopting the wallet makes sense.”

“Mobile wallets need to actively focus on anything that improves the customer value proposition – and keep doing that to such a degree that they present the customer with a substantial improvement to utilizing the alternatives of cash or credit cards,” he said.

Changing innate behaviors
The consumer uptake of mobile payments is directly related to the value received from using mobile wallets instead of physical cards, which may take the form of monetary savings, improved security, increased loyalty offerings or convenience, and as smartphone penetration in developed markets continues to rise, there will  not be a conversation around adoption trends anymore.

Mobile wallets tend to be a lot more popular and successful in developing countries, largely because there are few other traditional payment alternatives for large segments of the population. Mobile wallets are a stand-in for bank accounts and credit cards, which few have access to.

“One very effective strategy is in the travel industry – some travel service providers have been allowing customers to get immediate refunds on ticket cancellations – or reduced cancellation charges — if they use their mobile wallets as opposed to having to wait two weeks,” Mr. Bhavnani said.

However, loyalty must have a broader definition than just points, miles or free hotel nights, as customers may spend to earn loyalty points but not necessarily redeem them for the rewards.

As an example, Open Table’s payment app for restaurants makes perfect sense because it saves diners the hassle of having to wait for the bill, handing over a credit card and waiting for it to come back again when the customer just wants to leave. In this case, there is value in giving the customer additional payment choices, where the usefulness is returned time and does not require action to redeem anything.

Open Table m-payment

“The most important factor is to know your customer,” said Alex Campbell, co-founder and chief innovation officer, Vibes, a Chicago-based mobile marketing technology company.  “Know what each customer values the most and then find a way to reward them in a way that reinforces that bond.”

“Next, because the content is digital and on my phone, it must at least appear to be customized for the individual. Ideally you want reward and loyalty content to be timely, relevant to where someone is, and personal,” he said.

In May, SeaWorld Entertainment Inc. enhanced its Discovery Guide app with an incorporated  mobile wallet to empower guests with on-demand, one-touch purchasing. This summer mpayments will allow park guests to instantaneously purchase upgrades to pass long lines with Quick Queue, or buy the All-Day Dining Deal without having to reroute.

SeaWorld’s multi-year focus on digital innovation includes the recent introduction of mobile ticketing and responsive Web design as well, making it among the first in the theme park industry to adequately leverage these functionalities. Insights from consumer trends and mobile technology leaders guided the development of new enhancements in two key areas: increased utility and easy purchasing.

That being said, the launch of the smartphone has ushered in a new way of thinking as consumers are becoming more tech fluent and see the smartphone as an integral part of their day-to-day lives. Therefore it is only natural to want to use them to save coupons, tickets and more.

Overcoming challenges
Mobile wallets allow retailers  and all providers in general to get consistent purchase data keyed against a particular consumer against time.

Retailers always know what a particular transaction looks like, but they are not always able to link a particular consumer to all their transactions over time, since a consumer can pay with a variety of credit cards and also with cash at different times. Anything that allows them to see purchase data over time tied to a consumer is clearly a good thing for retailers – hence the adoption of store loyalty cards for example.

“Marketers can gain a lot of valuable insights by leveraging mobile wallets,” said Yoni Solomon, product marketing leader, Vibes. “We can tell who has saved or deleted mobile wallet content and there’s also the location piece, where marketers can see which locations consumers save to their mobile wallet offers and loyalty cards.”

“The introduction of beacon technology into the in-store experience also opens up huge opportunities for in-store location data. The main challenge marketers face is increasing mobile wallet adoption – by presenting more opportunities for their consumers to save content to their mobile devices,” he said.

Quick growing frozen yogurt chain Yogurty’s addresses the adoption challenges faced by some mobile wallets with the integration of its loyalty program as an incentive to propel mobile payments, and has recently launched Yogurty’s Mobile, an application that empowers customers to pay for their purchases while earning loyalty points, redeeming rewards, participating in contests and also sending gifts to friends and loved ones.

But it is not all about convenience. There are several brands that have offered mobile pay but have failed. Simply “going mobile” is not a precursor for guaranteed success. The program itself must be well-designed and integrated with the in-store experience

“It’s simple, but true. To get the most out of your mobile wallet strategy, tie it into your existing marketing mix,” Mr. Solomon said. “Email, SMS, web, apps, direct mail, QR codes. All of these channels and more can be used to distribute mobile wallet content to your audience.”

“Priority number one for brands and retailers looking to build a strong mobile wallet strategy is to drive adoption. The best way to do that is to present your audience with as many mobile wallet opportunities as possible.”

Retailers have been tracking wallet content like coupons for decades.  The mobile wallet just provides more data faster, which can really help retailers’ understand and influence their customers’ purchase process.

For example, it no longer takes months for retailers to know if a particular coupon is actually influencing customer behavior, it takes minutes.  Loyalty programs can now reward individual customers with whatever that particular customer values the most.

“Consumers’ mobile wallet platform of choice will be the common way people save coupons, offers, loyalty tickets and more,” Mr. Solomon said.

“For marketers, it’s a win-win. Mobile wallet is location-sensitive, delivers more valuable data than you could ever get with paper or plastic options and is more cost-effective to produce at scale.”

“The movement to digital has begun – spearheaded by the wallet and phone in your pockets,” he said.

Final Take
Michelle is editorial assistant on Mobile Commerce Daily, New York