The ecommerce website landscape is experiencing major changes as the growing mobile payment market becomes increasingly competitive and promises to cut transaction costs and increase customer loyalty. Indeed, the big tech names are all entering the mobile payment business, each hoping to attract customers with mobile ecommerce website strategies aimed at connecting more deeply with them and claiming a piece of the mobile payment market.
But is not only big tech giants like Google or Microsoft who see mobile payment as a big opportunity platform. Retail names have long been entering the mobile ecommerce website game with “digital wallets”, apps which allow users to make payments through their smartphones instead of their credit cards or cash and that help big stores target advertising better by having access to more comprehensive customer’s data and shopping habits.
“Retailers hope to attract customers to their own mobile ecommerce website services by giving discounts and rewards to those using them, while also linking payments automatically to loyalty schemes and offering features like saved shopping lists,” says Adam Johnson, marketing analyst at Morgan Stanley.
“And we view businesses as overall beneficiaries of the growing mobile payment interest,” adds Johnson. “We estimate expected returns will justify any further investments required in enabling mobile payment technology.”
Apple is a great case study to explain the mobile payment scenario. If you thought iPhones and iPads were the biggest sources of revenue for the Cupertino tech giant, you’d be wrong. It’s actually ecommerce, via iTunes, iBooks and the app stores. A segment that was up 19% to 4.4 billion in the first quarter of 2014.
“The mobile payment aspect of the business is something that we’ve been intrigued with, and that was one of the thoughts behind Touch ID. You can tell by looking at the demographics of our customers and the amount of commerce that goes through iOS devices versus the competition that it’s a big opportunity on the platform.” said Apple’s CEO Tim Cook on his last earnings call.
However, market experts still show uncertainty on how the mobile payment market will integrate, with customers being unlikely to use a variety of services for different stores. In this case, the ecommerce website success of Starbucks can shed some light on these uncertainties.
The coffee giant launched its mobile payment and rewards app in 2011, attracting over 10 million users to date and with the company looking for ways to expand the program beyond its own network. “The mobile payments platform has given us a higher degree of frequency and loyalty and the question is how can we leverage that beyond our stores,” Starbucks Chairman and Chief Executive Howard Schultz told CNBC television.
Meanwhile, an attempt to create a mobile payment app universally accepted by retailers has recently launched in Germany. Yapital, owned by ecommerce firm Otto, has gone live in thousands of stores and also allows users to pay online and make peer-to-peer transfers.