Social media channels are no longer simple networking platforms. Today, they have morphed into real digital marketplaces where consumers and merchants buy and sell products and services. In the wake of this shift, discussions on social media platforms are equally driving the adoption of digital wallets. MasterCard conducted a study- The 2017 Digital Payments Study- which revealed that shoppers are being massively influenced by social media to adhere to digital payment. PayPal conducted a similar study which yielded same findings.
Consumers have a high interest in innovative payment methods
The survey conducted by MasterCard tracked discussions on social media platforms. Together with PRIME Research, the company dissected over 3.5 million posts on Twitter, Facebook, Instagram, VKontakte, Forums, YouTube, Google, and Weibo. The study spanned across 188 markets worldwide. The findings were interesting: 75% of these discussions concerned innovative payment methods. It was observed that shoppers have a deep interest in digital payments that have the power to facilitate purchases rapidly and securely. The term “digital wallet’ was mentioned over 2 million times, mostly on Twitter. In other words, the idea of shopping with a click is more appealing than ever. The study further revealed trending consumer behavior that can help marketers target their campaigns successfully.
On a parallel note, the study conducted by PayPal resulted in similar findings: social media platforms are no longer networking platforms but have become digital marketplaces. It was also observed that consumers are increasingly demanding seamless and efficient payment experiences and that digital wallets seem to respond to these needs. For its study, PayPal surveyed over 4,000 consumers and 1,400 merchants from 7 different markets in Asia. The region was chosen because of the rapid growth of e-commerce unfurling itself there. PayPal concluded that digital payments have a critical role in not only satisfying customers but in providing a secure means for merchants to sell their products and services on social media platforms.
Selling on social media is an appealing option
Selling on social media platforms is becoming alluring for merchants who see low overheads, ease of setting up and a readily available consumer base. Fifty-seven percent of the participants of the survey stated that it is easier to set up their business on social media, while 48 percent liked the idea of taking advantage of their network of friends and relatives.
80 percent of merchants surveyed stated that they are already using social media for selling their products and services. 72 percent have already adopted digital payment. 92 percent of merchants surveyed revealed that such commerce has considerably enhanced their financial condition. PayPal grabbed the largest share of digital payment channels with 71 percent. Alipay followed with 36 percent and Google Checkout with 25 percent. It is no surprise that the proliferation of commerce on social media is expected to continue. It is indeed viewed as bearing the potential for economic empowerment and greater financial health.
Further than that, social media platforms are increasingly being used by individuals to casually sell goods and services, dispose of unwanted products and monetize their skills and hobbies. In this sense, apart from earning an additional income, these individuals are empowered to become entrepreneurs while escaping the usual risks linked to traditional retail business models. 89 percent of consumers participating in the survey shared that social media platforms have enabled them to start a business on their own while encountering lower risks than usual.
Service providers are taking advantage of this trend as well to create and promote new modes of payment to increase the convenience of a shopping experience, reduce cart abandonment and subsequently, generate larger revenues for businesses. For instance, PayPal developed PayPal.Me targeting those engaged in business activities as well as being encouraged by the need to enhance its customer-centric approach. It is a personalized link allowing for swift and secure transactions compatible with social media platforms, drastically shortening the cycle between the discovery of a product or service and purchasing it.
Shoppers are keen to adopt innovative technologies
Digital wallet earned more than 2 million mentions on social media, mostly being on Twitter. There are certain specific topics and functions that appealed to some shoppers more than others.
As the way consumers pay for goods and services changes, so do the opportunities marketers have to engage with them in a meaningful way. Loyalty programs can be likened to a mobile content marketing that is always in the hands of the customer. Digital loyalty programs can be stored in the mobile wallet and do not require a physical card that consumers can lose or forget about. The MasterCard survey revealed that shoppers are always on the lookout for loyalty programs and means to easily store loyalty cards. To encourage digital payment and customer engagement, merchants should hence take note if this trend. Digital loyalty cards, coupons, and even reminders about coupon expiration and loyalty card balances are all now inherent elements of the mobile-wallet ecosystem that merchants should exploit. Meaningful lock-screen reminders, for instance, before a discount coupon or airline miles expire, may be sent while encouraging them to make a purchase decision at the same time.
Closed-loop transportation system
Consumers equally expressed their need for additional features in digital wallets supporting closed-loop public transportation systems. Such a contactless payment system allows usage of a stored-value card for payment of transportation services. For airlines, boarding passes can be integrated as a native feature into the digital wallet or application.
Artificial intelligence and smart home assistants
The second most discussed payment topic on social media in 2016 was the use of innovative technologies like artificial intelligence (AI) and smart home assistants. These two aspects triggered unprecedented interest on behalf of shoppers, keen to embrace such technologies for shopping. AI may just be starting to see the era of its own in digital payments but if industry trends are to be believed, it’s fast becoming the soul of the global fraud-fighting mechanic.
Robotics is quickly gaining momentum in banks to automate their everyday finance and risk processes-the best strategy to protect data from being stolen by hackers. Machine learning is being used to combat frauds, adhere to regulations and enforce preventive measures against any leakage of sensitive information and data.
Chatbots are a good example of software that uses AI to process language from interaction with humans in chat programs and virtual assistants. Behavior patterns and anomalies can be detected on a completely new level. Financial institutions are rapidly adopting this technology to automate customer service and reduce transaction costs.
There has been an explosion of connected devices lately. Watches to cars are being connected to enhance customer experience and convenience. The use of wearable mobile payment devices for shopping was the hot topic on social media platforms as technology developers and payment providers negotiated deals. A large number of shoppers in the Asia-Pacific area even fed rumors on the launching of wearables being paired with digital wallets. By 2023, the payment volume via wearables is expected to soar to $501.1 billion, representing roughly 20 percent of all proximity payments, according to a study conducted by Visa and PYMNTS. This study further revealed that one out of every four consumers has a connected device.
Shoppers expressed their interest to embrace smart assistants for sending and receiving mobile payments. The interest for smart assistants was largely concentrated in North America. Smart assistants are mobile payment readers located at various points around a store, where shoppers can scan their own items and make payments with their mobile device without waiting in the checkout queue.
The Internet of Things
North Americans and Europeans were equally very enthusiastic regarding the Internet of Things (IoT). This inter-networking of smart devices may well become the Internet of Payments as payments could be made from any connected device.
It is predicted that IoT will likely follow the same evolutionary path as e-commerce, going through three different stages. In the first stage, devices become connected, reminding of the days of when users embraced online communication in the late 1990s. The next stage is the gathering and processing of data. An example is retailers and merchants displaying their services and products in virtual shops. The last stage represents flourishing e-commerce developments on the Internet as Iot becomes more of a commerce portal ensuring secure payments.
It is, however, forecasted that IoT will shift from software to hardware as the physical functionality of the system is seen as crucial.
The security of transactions cannot be bypassed
Shoppers want peace of mind and secure transactions. As such, it is clear that the success of emerging technologies will largely depend on of the level of protection and security they offer. Almost half of the shoppers were interested in biometric uses, such as facial recognition, and fingerprint and touch authentication. In contrast, many people surveyed were not aware of the methods of security and protection that were being looked at for the future, and more than half did not know what the security protocols in use today were.
MasterCard’s Identity Check Mobile app, a Snapchat patent, and Google’s Hands-Free app intrigued consumers. Other high-end systems for prevention of fraud were highly sought after; consumers no longer want to rely on passwords that can be easily forgotten and can be a real hassle during resetting.
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