Depending on who you ask and where you are asking the question, you will get a variety of answers to this question: Are consumers really using their mobile phones to pay for stuff?
The answer is yes if you ask people living in emerging countries who live and breathe by their mobile devices, using them to do many things: send money, pay bills and even buy things in a store.
In the developed world, it’s more of a mixed bag.
Starbucks, of course, lays claim to the most successful in-store mobile payments scheme with now 22 percent of its volume coming from mobile devices.
The various “Pay” players — Apple, Android, Samsung — have all met with mixed success globally for a variety of reasons that we’ve covered innumerable times: lack of merchant acceptance, lack of access to mobile devices with the right app, concerns over security.
Force of habit to just whip out the good, old plastic card.
Getting consumers to change that habit will take time and — at least some of the providers are hoping — a few well-placed incentives to get them over the hump.
So, what have the mobile payments players tried?
Here’s a snapshot.
Samsung Pay Pays Back (In Gift Cards)
Samsung has tried not once but three times in the past five months to get consumers to try Samsung Pay by giving shoppers the one thing that all shoppers love: money.
In December, it ran a promotion that gave consumers $100 off any Samsung.com purchase after they activated and used Samsung Pay for any promotion. It also joined forces with Best Buy to offer a $50 Best Buy gift card for new Samsung Pay users who added a credit card to their profile (after registering with Samsung Pay and on Samsung’s website).
And then, just last week, Samsung rolled out a new incentive plan to entice consumers to activate and use it. Samsung offered a $30 gift card to be redeemed at a select establishment of the user’s choice (Best Buy, eBay, GameStop or Regal Entertainment) after Samsung Pay was activated and used.
As long as Samsung Pay is used three times between April 15 and May 10. Samsung Pay is hoping that three times (and $30) is enough repetition to get consumers into the Samsung Pay habit.
Discover’s Cash Back Apple Pay Deals
Cash is the basis for Discover’s offer at the end of last year to entice Apple Pay users to use their Discover cards.
It was a pretty rich incentive, too. Discover was offering 10 percent cash back on up to $10,000 of in-store purchases. As an added bonus, cardholders with Discover it Miles, Miles or the Escape credit card will gain an extra 10 airline miles per dollar until they hit the bonus cash back spending limit.
The added incentives to boost Apple Pay adoption come as part of Discover’s effort to further expand its user base. Earlier in 2015, Discover rolled out a new scheme to offer endless double cash back to new customers at the end of their first year since joining. What the deal entailed was offering a 10 percent cash back bonus to all payments made via Apple Pay using a Discover card. But that was just for a promotion during the holidays.
Starbucks’ Prepaid Incentive Plan
Not that Starbucks needs any help in getting consumers to download and use its mobile payments app, but it plans to soon test an incentive that combines loyalty, prepaid and mobile.
The Starbucks prepaid card, which is set to be released by the end of 2016, will be linked to its existing loyalty program in order to get more customers into the Starbucks loyalty programs by linking a payment card offered by Starbucks to its mobile app.
This comes on the heels of a few other of the coffee giant’s latest moves to get more consumers hooked in the app. Taking a page out of the airlines’ rewards playbook, Starbucks is now awarding points based on the amount of the purchase rather than the number of visits — hoping to stimulate both usage of the mobile app and purchases of goodies.
Visa Checkout + Dunkin’ = Free Coffee
Earlier this year, Visa Checkout got into the in-store mobile payments game in a bit of a clever way.
Any consumer who loaded at least $25 in their Dunkin’s mobile wallet account (used in store) using Visa Checkout as the funding source would get an extra $10 credit in their Dunkin’s wallet. The hope, obviously, was that more Dunkin’s customers would be inspired to download and use the wallet and develop a preference for Visa Checkout for reloads and shopping on the Web.
Use Android Pay — Get A Free Chromecast?
Google also has been known for its unique promotions to attempt to spark interest for Android Pay. This included a “Tap 10” promo, which gave users a variety of rewards for using Android Pay.
As its name suggests, users were rewarded for their first 10 taps made with Android Pay.
One of the rewards received after those first 10 taps was a free Chromecast.
And then, there was the free data scheme that was offered through Verizon this week. As part of a new promotion from the wireless carrier, Verizon is offering up to 2GB of free data if customers use Android Pay at a retailer that accepts the mobile payments option. The customer can gain 1GB of free data for purchasing an item and can gain a second GB after the third purchase made via Android Pay.
PayPal released a report this week (April 20) that seemed to suggest that the best way to get consumers to use mobile payments in store is to offer them more value than just tapping or otherwise using their phones to pay — something we have been talking about for a very long time.
What The Data Shows
A global study of retailers around the world asked merchants questions in order to better understand how their customers are using mobile devices in physical stores today and how they would like to be using those mobile devices in the future.
The answer is a combination — more appropriately, an integration — of four connected stages in retail and using mobile to optimize all four:
1. Being motivated to shop
2. Searching for what to buy
3. Deciding what to buy
4. Paying — and receiving rewards for doing it
The incentive, at least in this case, is about getting the consumer to buy.