No one knows what crazy, cool technology or gadget will revolutionize our world next. But what can be pretty reliably predicted is the adoption of those tools. There are the early adopters who eventually spread the word, then an innovation sees greater adoption among consumers and then, often, business users will follow suit.
According to U.S. Bank Chief Innovation Officer Dominic Venturo, that’s likely how it’s going to play out for the adoption of Apple Pay and other mobile wallet solutions. Which is why the bank recently announced that even more of its card products are now compatible with Apple Pay.
The move brings all of U.S. Bank’s consumer and small business card products into the mobile wallet umbrella, and the bank said it plans to include its commercial card portfolio for larger corporations into that mix sometime later this year.
While it may seem obvious that the enterprise would follow consumer innovation adoption trends with products like the smartphone, mobile wallet use is a less obvious solution for businesses.
But, according to Venturo, the pattern of innovation adoption is, more or less, unwavering.
“When you look at market adoption of a new technology, there is a curve that tends to be pretty predictive,” he explained. The initial 5 to 7 percent adoption rate of mobile wallet tools in the very beginning soon came with greater chatter among the general consumer population. Large retailers and high-profile names began accepting the technology, and now, it’s unsurprising that it would be business’ turn.
“If you’re a small business, you are, by definition, also a consumer,” Venturo explained. “However, when you’re a small business and you’re doing business with a bank, one of the things we hear over and over again is: ‘I want to be able to keep my business and personal life separate, but when I find things that work well for me on the consumer side, I would like that to also be available to me for my business when it makes sense.’”
He went on to describe this as a sort of “waterfall effect,” where consumer habits end up guiding work-life habits.
At the very beginning of mobile wallets, Venturo said, U.S. Bank included support for these solutions with both consumer and small business cards. It was a move based on the natural evolution of technology adoption.
“If a small business owner is an early adopter of Apple Pay for consumer products and they also have our small business card, it actually creates a disconnect if the small business card can’t also make that same payment happen when they want to be able to make a business purchase,” he said.
It’s not difficult to imagine that when a small business owner wants to make a business purchase — run down to the store for some more pens and Post-its, purchase some new signs and branded stickers or the like — they want to do so the way they pay for goods and services as an everyday consumer.
When we enter the realm of larger corporations, however, it becomes less obvious as to why a company would want to adopt a mobile wallet solution. After all, multinational conglomerates make purchases a bit larger than your average, everyday Office Depot run.
But the use cases are there, Venturo said.
“If you think about the real opportunity, there is some casual purchase volume that can happen at retail point of sale, but that’s not really the big opportunity,” the executive stated. “The opportunity is around travel and entertainment.”
He elaborated that, for T&E, large corporations could want to adopt mobile wallet solutions to replace the card-on-file payment tactic they traditionally use. A mobile wallet for a mobile corporate employee is the largest opportunity based on the technology and the solutions that are available today, Venturo added, but the possibilities don’t stop there.
Venturo explained that other use cases for mobile wallets within the corporate realm include concepts for things like virtual cards, spend control capabilities for individual employees and tokenization features provided by mobile wallets to manage the security and the use of these solutions within a business.
Regardless of how it’s used, the U.S. Bank executive said it’s all about providing business users the convenience and seamlessness of payment, the same way innovation has brought these benefits to consumers.
If — and when — mobile wallet technology begins to penetrate mid- and upper-market corporations, banks and FinTech players will have to address the challenges of those businesses that are unique from individual consumers. Features like tokenization and security are sure to be high in enterprise users’ priority lists, and until then, large businesses may be skeptical of these tools.
Even consumers are still getting used to mobile wallets. But Venturo said that, in the earliest days of these tools, many of the bank’s customers, both individual and small business, were passionate about getting on board. As the market continues along the adoption curve, businesses large and small are sure to follow, but it will take time.
“This is a long game,” Venturo said. “It’s not a quarter-to-quarter game. This is really about having an eye towards how we think the technology is going to evolve over the next few years and how that will eventually integrate into a fully digital payment system.”
“We’re happy with the adoption and engagement we’re seeing across consumers and small businesses,” he continued, “and we think that trend will continue. We’re pretty pro-mobile.”