Youth market is ready to use mobile phones as wallet: survey
Consumers, especially those in the youth market, confirmed strong interest in using their mobile phones as a wallet, according to a recent poll by Alcatel-Lucent.
The study, conducted by Alcatel-Lucent with members of its Youth Lab over a two-week period this summer, indicated that 81 percent showed a strong interest in the service and 89 percent would be willing to pay a monthly fee.
Most notable in the survey results was the appeal of application scenarios and the ability for these applications to save time. The option to “Buy a movie ticket without needing to wait in line” was the most appealing to respondents. Seventy-five percent were interested in “location-based coupons” and “profile-based coupons.”
The top three most desirable applications with more than 85 percent interest were wallet balance and transaction check in real time, pay for public transportation with mobile phone and receive an electronic ticket.
Mobile Commerce Daily’s Dan Butcher interviewed Toon Coppens, Antwerp, Belgium-based marketing director of the mobile wallet service at Alcatel-Lucent. Here is what he had to say:
What is the key finding of the youth market survey?
The key finding is that youngsters from all over the world are eager and ready to endorse a mobile wallet and to replace their leather wallet with an enhanced mobile one.
They see the value of being able to pay at a vending machine when they are without coins or right change, they are eager to be able to pay their friends immediately back for lunch via the mobile, as well as they like to be able to check the loyalty balance and available coupons immediately.
Moreover, they like the budget-control aspects that real-time balance check and history overview can bring.
What is the most surprising finding, and why?
Most people in the industry agree that a mobile wallet will be provided for free to the consumers and that the merchants pay transaction fees as they do now for the leather wallet cards.
From our survey, it appeared that youngsters from all around the globe are even ready to pay a monthly fee for a mobile wallet service and the median fee is an astonishing $7.77 USD.
The survey participants from Japan, however, were the only one to find it should come free, as they already have such a service provided for free by NTT Docomo.
What advice can you give to carriers, banks and financial institutions based on your findings?
Consumers are ready to embrace mobile payment and marketing whenever it provides them better CRM and lower payment costs.
The technology is ready as well and we all know that there are different consumers segments with different preferences, so providing a broad choice on payment settlement options is key.
As such, we encourage carriers and banks to move beyond the talk-and-pilot phase and get [commercial] rollouts started.
Cash replacement and mobile CRM will anyhow grow the total addressable market pie for all players in this industry.
Why do you think more consumers are using their phones for mobile payments and mobile banking?
Convenience, convenience and convenience. A mobile device is your front pocket, personal, always-and-everywhere device with a display and the interactivity required making the dumb wallet a wallet 2.0.
For example, instead of saving your paper receipts for your travel expense report, you could just mark these expenses on your phone and bring them in easily, regardless of when you paid them via a credit card applet, a stored value account applet or postpaid bill.
Instead of filling in a paper to exchange loyalty points into a coupon and waiting for some weeks to get the coupon delivered, you could just push one button on your mobile device to make this happen and get a digital coupon delivered.
What is driving growth in the mobile wallet/payments space?
Brands that have experience with running ecommerce services next to their bricks-and-mortar shops want to replicate the agility and convenience they experience in the online world also in the real world.
Online they know who is buying, and they can easily offer various payment options and have a full reporting available from advertising to direct marketing and sales.
That same integrated marketing and payment experience is now moving into the physical world and drives this space.
What is Alcatel-Lucent’s strategy behind the launch of its mobile wallet service? Which companies have adopted its mobile wallet platform?
We are convinced that over time the mobile phone will replace your leather wallet and keys and that every card, coin and coupon in your leather wallet becomes an application on your phone.
The advantage for consumers is convenience, by using the screen and interactivity of the mobile.
The retailer or merchant can identify consumers easily and move CRM to the next level.
Wireless carriers can accelerate their identity management role and provide aggregated access to financial services.
Alcatel-Lucent’s mission is to provide the most comprehensive turnkey mobile payment and marketing solution to carriers and enterprises, including retailers and brands, built from three components:
No. 1: Identity management: authentication, profile server and know your customer.
No. 2: Channels to initiate transactions: contactless and NFC, SMS, Web, mobile applications and 2D bar codes.
No. 3: In-house and third-party financial services: stored value account, payment gateway, payment institution license and MasterCard or Visa prepaid card acquiring and issuing license.
The mobile payment and marketing vendor market is very fragmented, making it a complex and long process for carriers and enterprises to launch services.
By pre-integrating components and by including all components from transaction initiation over identity management to transaction settlement, we are solving this issue.
Various carriers, alone or together, and enterprises are using and implementing Alcatel-Lucent’s mobile wallet service for their mobile payment and marketing implementations.
This includes a municipality—the city of Antwerp—for a marketing and CRM project, a social media provider looking to monetize its online community in the real world, a retail chain wanting to lower the cost on merchant service charge, an interchange fee, via a closed loop payment solution and a lunch meal voucher company, Accor Services, for digital vouchers.
Alcatel-Lucent links mobile payment and marketing also to related services like mobile advertising solutions and the charging and rating product for carriers.
Furthermore, the wallet is seen as one of the key enablers inside the Alcatel-Lucent application enablement vision, assuring that carriers can monetize their identity management role via third-party application developers.
Dan Butcher, associate editor, Mobile Commerce Daily