Digital wallets have been the talk of the payments industry for a while now. While there is ample interest in cashless payment options, adoption rates are surprisingly slow at the moment. Many reports have found that a main concern people have with this technology is security.
Fear of identity theft or financial fraud are on the minds of many Americans lately following the aftermath of data breaches at major retailers like Home Depot and Target over the past few years. These fears are legitimate, however, many mobile wallets are actually safer than people give them credit for.
Another major roadblock in adoption rates is habit. People are simply used to carrying around cash and cards, and taking out their wallet when it's time to pay. Changing the routine takes time and reassurance, but it's a goal credit unions would be smart to work toward with their mobile apps.
Changing the habit
Habits are often changed slowly, through repetition and a recognition that the new way is better in some way than the old one. In this case, mobile wallets are more convenient, and in some ways more secure, than using cash or cards. However, there needs to be a reason for people to begin breaking their old habits and making room for a new one.
According to PaymentsSource, credit unions can set the new habit in motion by using something many consumers are already taking advantage of: peer-to-peer payments. These solve myriad problems some people encounter on a regular basis. For instance, roommates that get an electric bill need to figure out how to pay the bill in a fair manner. There are plenty of ways to solve this problem, but peer-to-peer payments are as simple as taking out a phone and following several simple prompts.
One alternative option is to write a check - a habit that has largely been on the decline. According to the Denver Business Journal, one poll found that 60 percent of people either never write checks or only write them a few times a year. Another option could be to alternate who pays the bill, which can easily be forgotten or confused.
Peer-to-peer market grows
Business Insider explained that peer-to-peer payments have become a $1 trillion market worldwide. People don't just use them to help split up bills. They also use them to pay independent workers, split bills at restaurants and pay family members and friends back for small purchases.
Mobile Marketer pointed out that the number of people using alternative forms of payment like peer-to-peer is rapidly growing, and many companies are trying to get on board with the trend. Messaging apps like Facebook Messenger and WeChat have been attempting to gain market share.
"As Google's Jason Spero and others have said, mobile is for action," noted Jeff Hasen, the founder of Seattle-based Gotta Mobilize, according to Mobile Marketer. "P2P payments bring convenience that is universally sought … An estimate from Business Insider said that mobile P2P transactions could reach $86 billion in the U.S. by 2018. And there is so much more upside for mobile devices given the fact that the global P2P payment market exceeds $1 trillion."
As more people continue to adopt peer-to-peer payments into their everyday life, they will seek out the best ways to perform this action. A credit union can earn the trust of its members by offering a simple, secure peer-to-peer payment platform. By doing this, they will gain traction in this space.
Slowly, using the app for peer-to-peer purchases will become a regular habit. This will lead them to using the app for more mobile payments, and eventually, trusting the app as a mobile wallet they can use for everyday purchases of all kinds.