The smartphone has changed human behavior significantly. It’s changed the way we communicate. It’s changed the way we share. It may even be causing the brain to evolve.

But what about the way we pay?

While we might use our smartphones in-store for research purposes before making a purchase decision, actually paying with the device remains quite niche. This looks set to change in the coming years, however. The more we can do with our mobiles at the checkout, the more consumers will be sold on using their smartphone to pay. Benefits for consumers will go beyond just paying for things. They’ll be able to integrate their loyalty program, too – collecting loyalty currency and using coupons.

The future of customer loyalty is mobile.

Consumers welcome convenience

People have embraced the mobile wallet in a similar way to other technological innovations – with scepticism. While some people have happily embraced paying with their mobile, the majority of consumers have preferred to carry on paying the same way. Generally, humans aren’t fond of change. But eventually technology forces people to do things differently. Eventually it becomes impossible to ignore the convenience and speed of new innovations.

According to a Business Insider Intelligence research study, in-store mobile payment volume in the US will rise by a compound annual growth rate of 80% between 2015 and 2020. By 2020 they expect mobile payments volume to be $503 billion. Up from $75 billion in 2015.

One of the reasons why those behind this study expect such significant growth is the fact that mobile payments will include loyalty integration. Customer loyalty must be simple and convenient for consumers to embrace it. In recent years, consumers have grown apathetic toward loyalty programs. If the future of customer loyalty is one where consumers can easily pay, redeem and accrue currency on their mobile, engagement will surely increase.

Consumers need to see perceived value in loyalty programs if they’re to participate. If this value is difficult to spot, they probably won’t bother with it. Convenience is really valuable to consumers. If you had the choice of scrambling around in their wallet or purse for your loyalty card, or quickly swiping your smartphone, you’d probably choose the latter.

Millennials will influence the future of customer loyalty

This is particularly true of millennials. This generation is leading the way in mobile payments and would be a smart group to target first. According to a 2016 research study by Ipsos Loyalty called The Millennial Influence, over half of US millennials are currently making mobile payments of some kind. Meanwhile 8 in 10 US millennials agree that technology gives them more control.

At Currency Alliance, we think businesses must look to the future. We believe that those businesses that are thinking about how they want to be viewed by their customer in 3 years time will be most successful. Those that carry on doing the same thing will probably be left behind. Millennials might be the early adopters, but, before long, other consumers are likely to be convinced by the mobile wallet too. Businesses must be prepared for this change.

Imagine that you’re a customer who’s signed up to a coalition loyalty program. It means that you have a loyalty account integrated with your payment methods on your smartphone. Because it’s a coalition loyalty program, you can use the same loyalty currency across a range of brands and stores. On the way to work you pay for a flight using your smartphone and accrue loyalty currency on your mobile account. That accrued currency can then be used to pay for some groceries on the way home from work. With a simple swipe of your mobile.

Convenience is difficult to ignore for too long. As smartphone payments increase in volume, it follows that the future of customer loyalty will be mobile too.

If you would like to talk further, have any comments, or would like information about our universal coalition loyalty currency, comcoin, please get in touch with us.