Today, there are over 6 billion mobile phone users worldwide. The landscape of technology is changing as things become more digitised. There is an increasing demand for speed and efficiency in the way we carry out everyday tasks. This digitisation has transformed the way businesses and consumers operate, revolutionising marketing, advertising, media strategies and business practices. This digital revolution is constantly asking- what’s next?


The answer: the mobile wallet is next.

The days of lugging around a jam-packed wallet, stuffed with receipts, coupons, vouchers and loyalty cards are over. New research done by the Commonwealth Bank reveals that mobile wallets are expected to replace physical wallets in Australia by 2021.

The way these mobile wallets work is that they use near-field communication (NFC) chips inside smart phones to transmit payment information. The customers selects the app they wish to make the payment with, enters their pin, selects the appropriate loyalty card or special offer and then taps their phone to the payment terminal. Simple as that.

This has a massive impact on the way customer loyalty programs are structured and their significance to customers. Mobile wallets will revolutionise the loyalty industry, with customer movements and purchases becoming easier to track and interpret. This technology will allow businesses to use and update their customer management and marketing strategies in new and innovative ways. With mobile wallets also comes the ease and convenience at which consumers can access loyalty programs.

PayPal President David Marcus says that this technology can be harnessed to create a unique and beneficial business-customer experience, “it has to be the experience you have online today. You’ll get what you want really fast, pay really fast and get out. And the merchant will know more stuff about you, and that will make your experience better.”

Starbucks is a good example of where mobile wallets and payment apps are heading. Starbucks is the most used digital payment app in America, with more than 10 million customers paying for their lattes with their mobile phones. It’s not just efficiency that makes this app so successful; it’s the customer experience that Starbucks offers at the forefront of the app.

Starbucks has created a rewards program, through the payment app, which offers instant discounts for free coffee or food, allows customers to easily refill their loyalty account and links them to real time rewards, all by the tap of a finger.

The app gives Starbucks exclusive and direct marketing links to their customers via the built in inbox which delivers free iTunes songs, eBooks and apps. Adam Brotman, Starbucks Chief Digital Officer says that “it’s enhancing the experience and the relationship with the customer. It gives us a tighter relationship with the customers.”

Where this technology is heading: The stats

Michael Harte, Group Executive Enterprise Services and Chief Information Officer, of Commonwealth Bank says, “consumers are ‘going mobile’ and they are clearly showing their preference for the convenience and simplicity of transacting on mobile anywhere, anytime and on any device. We expect this trend will only continue.”

CommBank research has found that 1 in 2 Australians agree that the majority of payments will be made via a mobile wallet in the near future.

  • 55% of people say they will use the mobile wallet to access loyalty schemes.
  • 44% say that will use the technology to redeem coupons.

Through their survey CommBank found that the most common frustrations with physical wallets are:

  • Forgetting to take money out (94%)
  • Forgetting to put specific items in a wallet (88%)
  • Having to carry a bulky wallet (77%)
  • Having too many cards in a wallet (50%)
  • Not being able to find the right card in a wallet (48%)

Angus Sullivan, Executive General Manager Cards, Payments, Analytics & Retail Strategy, Commonwealth Bank, says, “Mobile banking and payments are clearly going to be the primary functions of mobile wallets, at least in the short-term. However, it’s clear in many day-to-day instances consumers expect their smartphone to not only replace cash and cards, but also their bus ticket or loyalty and membership cards.

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