September 20, 2014
Today most companies understand that having their branded mobile app in a consumer’s smart phone is the closest connection they have ever had with their customers. With time spent on mobile devices rising, companies with a mobile app on a consumer’s phone have a spotlight and opportunity to connect like never before.
Apps are also an inexpensive communication channel. A bank would always prefer you to deposit a check using your smart phone through your banking app instead of going to the ATM or god forbid, the bank branch.
But the dirty little secret is that on average a whopping 80% of mobile apps are downloaded, used only once and eventually deleted. This phenomenon is true for most apps, free and paid, in various degrees. Even well financed
Functionality is key to make apps an indispensable part of a consumer’s life. Different app categories focus on different functionality to make them a repeat use tool for consumers. But if you are involved in commerce, such as banks or merchants, one functionality is king: payments. And a perfect example of app loyalty through mobile payments is Starbucks.
The Starbucks Example
Starbucks said recently that 11% of sales volume comes through its own mobile wallet. This is simply a staggering number of transactions for a single retailer; about four million mobile payments per week with around eight million consumers using mobile apps to pay.
Having this repeat use channel of communication with consumers is priceless for Starbucks. The app became the main customer retention tool and channel for loyalty program, offers, and other incentives to consumers.
Banking and merchant apps can become powerful wallets
Banks, merchants and other players involved in commerce have a lot to gain from turning their apps into powerful repeat use mobile wallets for transactions in the physical world.
APIs are about simplicity and empowerment
APIs have already made their mark in mobile commerce through easy to use APIs that enabled developers to add in-app or e-commerce functionality to their apps. Turning apps into mobile wallets for commerce in the physical world is can equally be achieved working with the right platform that abstracts the complexities of technology, security and devices from the developer. Ideally no developer should need to learn what is Host Card Emulation, Near Field Communication, Javacard security or other terms that make payments possible but mean little for them.
Bottom line is that APIs are about simplicity. And the industry should strive to bring this simplicity for apps to transact in the real world, where 94% of commerce happens. That will trigger an incredible amount of mobile commerce innovation in the real world by banks, merchants and other players and ultimately consumer loyalty to the apps that deliver the best mobile payments user experience.