Photograph by MAURICIO ALEJO
of mobile wallet users report
they’re more likely to shop
at a place that accepts them.
Source: Parks Associates
of those in the U.S. who use
a mobile app say they spend
more money when they do.
Source: Parks Associates
PRESS AND PAY
Last year, $30 billion was
spent at in-store
and the volume is projected
to increase 10-fold by 2022.
of U.S. retail sales were
infuenced by mobile
phones in 2016.
Source: Forrester Research
4 KEYS TO MOBILE-
DRAFT A BUDGET
And expect ongoing costs. “This
is not a one-time investment,” says
Paydiant co-founder Chris Gardner.
“You are opening your business to a
new channel; you need to maintain
and evolve it.”
SE T GOALS
“Think about what you and your
customers really want out of the
technological component of the
transaction,” says Jason Anello,
vice president of marketing for the
New York City–based restaurant
chain the Little Beet. “Does it need
to have a loyalty component? Or is
it just a way to make that transaction easier, faster, or better in your
“Be careful and respectful of
how you reach customers,” says
Gardner, as apps’ ability to push
lots of notifcations with location-based services like geofencing
and in-store beacons may prove
seductive. “There’s a fne line
between being helpful and annoying the daylights out of them.”
Enlist the help of an expert,
especially if you’re a brick-and-mortar retailer, says Gardner.
“Choose a partner that can deliver
a lot of stuf for you so you don’t
have to reinvent the wheel.”
where mobile-wallet customers can tap their
phone to complete their purchases—can run
from $150 to $300 each.
Alex Shuck, director of marketing and
analytics for LevelUp, advises small businesses
with 10 to 100 locations to budget at least
$20,000 to develop a custom app with the
basic suite of features. Businesses with more
than 100 locations, he says, may want to set
aside “at least the cost of opening a new store
into their mobile property as an initial invest-
ment—and half that again each year moving
forward.” That’s why some merchants go
with a simple white-label solution, or even
just a loyalty program and forgo a wallet
entirely. But larger merchants and those
seeking a custom experience may
fnd that additional features, like nutri-
tional information for restaurants,
are worth it. And keep payment-pro-
cessing fees in mind. Amitaabh
Malhotra, chief marketing ofcer for
OmnyPay, a digital-commerce platform,
says retailers using third-party wallets
like Apple Pay are at the mercy of
processing fees for each purchase—typi-
cally 2 to 3 percent for credit cards and
less than 1 percent for debit cards.
(Apple Pay charges 15 basis points to
the card issuer per transaction.) With
your own wallet, you can dictate what
payment types you’ll accept.
All that said, mobile payments
in the U.S. experienced a slight dip last
year. Transaction volumes are higher
outside the U.S., Tweedt says. So you
may be wary of investing in a technology
that isn’t mainstream—or dealing with
the headaches of training and testing.
Adoption of mobile-wallet technology
“is still pretty small” among small businesses, says Nicole Perrin, an analyst
Given those factors, rather than
follow in the footsteps of large retailers,
which build their own custom apps,
Tweedt advises launching your service
on a well-known wallet like Apple Pay,
Android Pay, or Samsung Pay. Apple Pay
in particular is worth focusing on, he
says, given its torrid growth rates.
“Merchants would be wise to adopt
mobile wallets now,” Tweedt says, so
they don’t miss out on an expected
spike in usage once Apple Pay starts
advertising directly to consumers,
slated to happen near the end of 2018.
If wallets make sense for your business
and customer base, they’re a great way
to connect to your consumers—but,
as ever, there’s no substitute for a killer
product or experience.