Mobile Wallet through the Eras: Before Coronavirus (BC) & After Coronavirus (AC)
Once upon a time in a land long ago, there was a place you could travel to without masks, social distancing, or worry. This fairytale place was called Anywhere. Literally, Anywhere at all.
Imagine, a time walking into the branch without a face mask! A time where working from home was “not possible”! A time when handing your community bank or credit union debit card to the grocery store clerk wasn’t a concern!
Recent times can now be defined as two eras: Before Coronavirus (B.C.) & After Coronavirus (A.C.). It will force the acceleration of the technology developed in the “B.C.” era into the “A.C.” era. Notably, Mobile Wallet.
Back in the BC era, I spent a summer vacation at a fairytale place: Disneyland. I was in line for lunch when I realized I left my wallet in my hotel room. Anyone who has been to Disney knows how inconvenient this is to leave the park, walk all the way back and forth to the hotel, and to stand in line to re-enter. Quickly attempting to troubleshoot, I remembered my trusty mobile wallet! I was so relieved at how much of a non-event this became that I quickly boarded the mobile wallet train.
In my case, this contactless way of paying was used out of convenience instead of safety. However, the point to be made is that although contactless payments and mobile wallets may begin to be used out of necessity as a safety precaution or forced in a retail environment due to the coronavirus, that’s OK! Maybe for the best even.
Mobile wallet is not only a virus-safe way to pay, but a fraud-safe way to pay as well. When you pay with your mobile wallet, the BIN on your debit card is masked. Often times when you insert your debit card to pay for a transaction under $100, the PIN on your card is bypassed which increases the chances of fraud, and the liability of that fraud lands on your
bank or credit union, not the merchant. Mobile wallet transactions do not process this way.
As a millennial, I look for my phone before I look for my wallet. Even with a contactless card, I would have been out of luck when I forgot my debit card at Disneyland. Adding my debit card into my Mobile Wallet (Apple Wallet, in my case) was a blessing in disguise at the time.
Traveling Anywhere in the AC era might look different than it used to with masks, social-distancing, etc., but not every change is a bad one. If you don’t take the old way of doing things away, the new ways are much slower to adopt. Coronavirus is forcing us to change and utilize technology in convenient ways we used to see as a hassle or too confusing to adopt.
According to a Mastercard study, half of consumers say they’re using contactless payments more after the coronavirus (source: paymentssource.com).
Daniel Wolfe a writer for PaymentSource said: “The data shows that over the course of several weeks, coronavirus has done something that payment industry has failed to do on their own: jolted consumers into changing long-entrenched habits.”
How will this affect my community bank or credit union?
Aside from mobile wallet, is your community bank or credit union able to issue contactless cards? According to the same source, a third of U.S. consumers also said they are using their contactless card more and more. This is great news for large issuers who have already begun issuing contactless cards, and definitely a trend smaller issuers should be aware of. Get ahead of the curve now! Not to mention, according to Investopedia, those who have a contactless payment card also tend to use it more often. Translation: More interchange income for your bank or credit union.
From experience throughout social distancing, paying through a restaurant or retail store’s app is becoming more and more popular now. I can order online, pay through the app, pick up my food and never even have to talk to another person. What are you doing to ensure your FI’s debit card has been entered into your customer or member’s mobile wallet?
Throughout the coronavirus I’ve noticed cash is becoming less and less relevant as well due to the notion of germs and the adoption of mobile wallet/contactless payments. As a millennial, I can say hardly, if ever, I carry cash. What does this mean for the AC era? Will cash go away more rapidly than we initially thought? According to LINK, the U.K.’s leading ATM network operator, its cash withdrawals fell 60% over the month ending in April compared with the same period one year prior. That’s a huge number. How will your financial institution make up the loss in ATM fee income?
Change after COVID-19
Coronavirus has forced change.
As non-essential business begin to reopen, will we ever go back to using plastic and cash the way we used to? Businesses were forced or expected to change by their customers or go out of business. According to Ralph Dangelmaier at PaymentSource: “Customers can pay through a mobile app in-store, assuming the business can afford an app; use digital wallets like Apple Pay, Google Pay, Samsung Pay, Venmo, PayPal, and others; do contactless, NFC payments through the point-of-sale system; or order from an e-commerce website and then pick up the goods. Notice that I left out normal ATM and credit card payments. No one wants to touch the card reader. Any shop that tries to reopen without at least some of the above options will lose business, plain and simple.”
Will typical brick and mortar business, retail and otherwise, even keep their office buildings or storefronts moving forward? We’ll see.
I save so much time paying ahead and picking up my takeout now (I mean seriously have you seen those Starbucks and Panera drive through lines lately?!) Maybe next time I go to Disney I’ll be paying for my sandwich through the Disneyland app anyway eliminating my brief frustration and problem solving mobile wallet solution all together.
Contactless payments aren’t going anywhere, and who knows. You never know when you’ll forget your wallet! Or hand sanitizer!
Research assistance from: Liz Roe