Author: Francisco Belo

The Growth and Rise of Mobile Wallets – Apple’s Passbook and Google Wallet

The current mobile wallet evolution is being fronted by Apple’s Passbook and Google Wallet with the ultimate goal of replacing physical wallets in favour of the smartphone. Both versions of mobile wallet offer roughly the same service, with a few variations.

Passbook and Google Wallet’s main features are storing passes, i.e. coupons, loyalty cards, boarding passes, cinema tickets, basically anything that used to be a piece of paper in your wallet, can now be kept safely in your smartphone. The principal concept is having one place on your phone to store everything you need.

Apple’s Passbook, launched in September 2012, is seen as the pioneer of using digital wallets to store loyalty cards and coupons, of which Starbuck’s was one its first brands. Although the app came out after Google’s, it’s path was clearly defined as a place to store passes rather than offer any form of payment.

Passbook is a native app, pre-installed in all iPhones, meaning that it only runs on Apple products and only those that run on iOS 6 system or later. One key feature of Passbook is that it enables iBeacon technology to offer geo-trigger push-notifications to iPhone users, which for example enables retailers to offer relevant, updated offers to customers whilst they are in their store. The iBeacon feature is something which Google are still in the process of developing.

The newest feature that Apple has added to iOS 7 system is a QR code scanner, used via the phone’s camera which allows the user to add mobile wallet content on-the-go. These passes can either be used as a digital pass or printed out to be used in-store.

Google Wallet’s journey to its current stage has been slightly different. Initially Google Wallet started as an online payment, Google’s answer to PayPal if you like, but the concept never took off and in September 2013 they moved to include the non-payment side, i.e. coupons, loyalty points, boarding passes etc. Google Wallet app that can run on any Android device with Android 2.3 or later and can even run on iPhones iOS 6.

In May 2013 Google rekindled their ambition to use Google Wallet as a payment alternative but this time by integrating it with Gmail enabling users to send money to anyone over the age of eighteen who has a Gmail account. Further in keeping with this idea Google have also introduced a quicker way to make online payments via the ‘Buy with Google’ button, allowing anyone with a Google Wallet account to make purchases on mobile apps and sites in only two clicks

As an extension of the app Google also now offer a physical debit card to go along with your Google Wallet app, which enables you to use its NFC (Near Filed Communication) technology to make one-tap payments.

Nevertheless, the whole Google Wallet service is still only available in the US, with no clear indication of when it will arrive in Europe. In contrast, Passbook has been available in Europe since its launch. Nevertheless, with the Android operating system being used on over 50% of current smartphone users’ phones, Google offer marketers access to a broader audience than Apple can. Therefore expect to see more retailers and brands incorporate Google’s mobile wallet technology in to their marketing plans in order to further create engagement and loyalty in their customer base, and ultimately increase sales.

There’s a clear distinction then that Google aim to incorporate their digital wallet as part of their wider plans of facilitating online payments for their users, whilst Apple’s Passbook is focused more on the non-payment side, solely being a place to store all the necessities of your wallet without making payments.

However with the launch of Apple Pay in October 2014, the in-store experience changed for retailers and consumers. Not only loyalty card are stored within mobile phones, the payment is made through NFC (Near Field Communication), a technology built-in iPhones. This means that the consumer only uses his smartphone to connect all services on the same mobile interaction. Adding the fact that Apple has already several major partnerships with major credit card services such as Visa, American Express, banks and retailers, this translates in a huge advantage for Apple.

iBeacon technology provides a glance in to the near future

Very soon we will see more machine-to-machine (M2M) communications between connected devices, allowing technology to create more efficiency and further improving our lives. iBeacons provide an insight in to the near future of that interconnected world of the Internet of Things (IoT).

Retail stores, airports and sporting events to name a few have already demonstrated why there is so much hype about the potential of ibeacons and the innovative ways it’s enhancing our mobile experiences, including more relevant, personalised marketing efforts and more effective ways of communicating with the public at events.

Apple’s release of their iBeacon functionality paved the way for a new way of looking a Bluetooth Low Energy (BLE) and unleashed the premise of using beacons in conjunction with smartphones, especially for digital wallets.

iBeacons are a great example of how IoT will function with cheap, low energy devices interacting with smartphones or tablets to bring ordinary objects or locations to life, intrinsically linking the digital and physical worlds together. Furthermore, the easy accessibility of obtaining information from a beacon makes them ideal for use alongside smartphones, with a simple but effective push-notification being the preferred current method of relaying info or sending coupons.

Large companies from Major League Baseball to Virgin Airlines have led the way in adopting beacons, but it’s in retail that many are predicting it to have the most influence, especially in customer spending with Juniper Research suggesting there will be over 1bn mobile coupon users by 2019, highlighting the importance of digital wallets such as Apple’s Passbook or Google Wallet in the mobile marketing sphere.

The current use cases of ibeacons is just the tip of the iceberg in its own future potential and that of the IoT which will create a world linked by internet-connected devices, which in turn will create more productivity for all.

Why now is the right time to incorporate digital wallet passes in to your marketing plan

Get ahead of the game and take advantage of the huge marketing opportunity that digital wallets have to offer. That’s definitely the message if the recent roll out by major companies of digital wallet and iBeacon technology is anything to go by.

We’re rapidly expanding towards a future where smartphones will be even more inextricably linked to every aspect our everyday routines. Current consumers desire more channels to access brand’s content and require fast, convenient ways to do it.

The non-payment side of digital wallets such as Passbook and Google Wallet is still nascent in terms of brand adoption, but as smartphone users are becoming more in sync with its functionalities brands should look to move their tickets or coupon and loyalty campaigns to more dynamic digital smartphone versions. Companies such as Starbucks, Major League Baseball and American Airlines have been leading the change to digital wallets and reaping the benefits as a result.

Digital wallets form an important part of the current trend of new mobile technologies which are all focused on creating unique and innovative experiences for customers whilst paving the way for a more seamless transition between the physical and the digital worlds.

Real-time communication channels such as iBeacons are challenging brands to give more relevant information to their customers and provide opportunities to influence consumer spending whilst in-store.

iBeacons are set to play an important role in all brand-to-customer interactions in the near future, especially for retail stores in the fight to win back market share from online competitors with digital wallets at the forefront.

The benefits of Apple Passbook for brands

Passbook offers brands a significant opportunity to drive engagement with customers and increase store foot traffic through one convenient app.

Passbook is an app native to Apple devices, pre-installed on all operating systems that run iOS6 or later. The essential premise is one place to store coupons, event tickets, loyalty cards and the like, but more than just being a digital wallet, it also represents huge marketing potential for brands.

The fact that Passbook is a default app means a target audience already exist that are accustomed to using it. As an example, in the US Passbook is already the 4th most popular mobile commerce app and a fifth of all iPhone users already use it to download coupons. Furthermore, with over 300 million iPhones around the world and all future devices set to have Passbook installed, the wide range of users that brands can reach is vast.

The convenience of having all a wallet’s non-payment aspects in one app is beneficial to both brand and customer. For example, the easier access to both coupons and loyalty cards allows brands to offer their customers a seamless interchange between the two whilst increasing sales and providing better customer service.

Location-based notifications enhance the dynamic features of a Passbook pass allowing brands to send updated information to their customer’s phone via push notifications, which highlights the potential to refine marketing strategies with more personalised, relevant offers. Apple’s iBeacon technology has already paved the way for geolocation to play a key role in brand to customer interaction.

Incorporating Passbook passes into a brand’s existing mobile marketing strategy has been shown to boost sales and increase coupon conversion rates, with 64% higher conversions compared to regular mobile web coupons. It also provides a totally different platform to a brand’s app, as consumers don’t want to fill their phones with apps for every different shop or restaurant, and require a simpler, more expedient way of utilising their smartphone whilst in-store.

Crucially for smaller brands, Passbook doesn’t need an app to work alongside it, as passes can be added straight to it via email, SMS or distribution campaigns in social networks. This opens up the barriers to entry, enabling brands with smaller resources to have a cost-effective way to offer their customers mobile content and drive up sales.

Passworks platform enable brands to create a pass, manage and distribute a marketing campaign that may take the form of digital coupons, membership or loyalty cards, and events or travel tickets, via Apple Passbook.

Mobile is happening!

Smartphone usage around the world is a reality. We are looking at around 1.4 billion users worldwide, and growing at a very fast pace. Worldwide, users have a very similar behavior. The smartphone is always on, always there, 24/7, its personal, location-aware and history-aware, creating a huge opportunity to use mobile as the key media format to drive real engagement with your customers.

Mobile is the perfect advertising channel to communicate with the brands and retailers target users. The mobile allows you to create true and real engagement with consumers because its built on users´ profile, context, preference, localization, immediacy, experience and above all relevance.