Lots of attention has been paid to mobile wallet programs in the past several months, and while many are excited about the spending options these present, others note that there may be another motive for developers.
The companies behind mobile purchasing platforms like Google Wallet and Isis may be giving consumers a new way to use their old accounts, but they’re getting something in return: The ability to directly advertise to consumers, according to a report from CNET. These platforms not only keep track of where and what borrowers spend their money on, but also allow advertising partners to more directly market to these users after the fact.
For instance, Starbucks has its own sort of mobile wallet, and tracks not only the amount spent on an associated store loyalty rewards account, but also how often the user goes into a location and what they buy there, the report said. Then, using that information, the company can tailor more offers specifically to that customer through multiple channels.
“I can give you a better way to pay,” Jaymee Johnson, director of marketing for Isis, told the tech news site. “But that’s not broken. It’s not too taxing to pull out a plastic credit card from your wallet. But what mobile payments also give you is a way to manage your loyalty cards and your financial life.”
In fact, in the past month or so, the industry has seen more companies move toward diversification of the mobile wallet, the report said. Not only will consumers be able to add their credit cards to these smartphone applications, but also store loyalty rewards, gift cards, coupons and other associated accounts, all of which will be tapped automatically when making a purchase at a participating retail partner.
The reason so many companies want to be involved in mobile wallets is because the projected value of the industry is rather high, the report said. Though right now a relatively small number of consumers use mobile wallets, researchers estimate the industry could be worth tens of billions of dollars in the U.S. alone within the next few years.
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The largest hurdle to widespread adoption of mobile wallets is seen as consumers’ hesitance to adopt the payment method, though many also note that a lack of available devices capable of handling such a transaction may be a hindrance as well.
Image: Daryl_Mitchell, via Flickr