By Laura DeLaCruz, Vice President, Business Development Officer & Chief Client Services Officer

In today’s fast-paced, digital-first world, convenience is king. As consumers increasingly turn to their smartphones for daily transactions, mobile wallets like Apple Pay, Google Pay and Samsung Pay have emerged as a powerful tool for both convenience and customer engagement. Mobile wallets have revolutionized the way people make purchases. By enabling seamless, contactless transactions, these digital tools have become a staple for millions. According to a Forbes Advisor study, more than half (53%) of people use digital wallets more often than traditional payment methods, such as paying with cash or swiping a physical debit or credit card.¹

For banks, ensuring their debit and credit cards are at the top of a customer’s mobile wallet is no longer optional—it’s essential. Mobile wallets have become the new “sticky” product and present a unique opportunity for banks to cement their position in customers’ financial lives.

When a bank’s debit or credit card is the default payment method in a mobile wallet, it effectively becomes the customer’s go-to for daily spending, which can drive both increased revenue and customer loyalty in several ways:

• Transaction Fees: Every time a customer uses a card to make a purchase, the bank earns interchange fees. The more frequently the card is used, the more revenue the bank generates. By being the preferred card in a mobile wallet, banks can significantly increase the volume of purchase transactions made with the cards they issue.
• Enhanced Credit Card Usage: Customers are more likely to use credit cards stored in mobile wallets for high-value purchases due to ease of access. This not only boosts transaction revenue since interchange fees are typically a percentage of the transaction amount plus a fixed fee, but it can also increase interest income if balances are carried.
• Cross-Selling Opportunities: A strong presence in a customer’s mobile wallet keeps the bank top of mind. This opens the door for marketing additional products like loans, savings accounts or investment services through mobile channels.
• Reduced Attrition: Mobile wallets encourage customer loyalty. Once a card is added to a mobile wallet, customers are less likely to switch to another financial institution, creating long-term value.

The integration of bank cards into mobile wallets offers a subtle but powerful “sticky” effect:

• Daily Engagement: Each time a customer opens their wallet app to make a purchase, they see the bank’s branding. This constant visibility reinforces brand loyalty and trust.
• Ease of Use: Customers value payment methods that are fast, easy to use and secure. A card stored in a mobile wallet often becomes the default payment method for everything from groceries to streaming services.
• Consumer Trust: Banks that invest in seamless, secure mobile wallet integration demonstrate their commitment to modern, user-friendly technology. This can deepen customer trust and satisfaction.

There are a few steps banks can take to proactively increase their customers’ usage of mobile wallets:

• Educate Customers: Many consumers are still unfamiliar with mobile wallet benefits. Invest in educational campaigns that highlight security features, ease of use and time-saving benefits.
• Simplify the Setup Process: Ensure that adding a card to a mobile wallet is quick and intuitive. Provide clear instructions via online banking, email campaigns, social media and in-branch support.
• Add Mobile Wallets to New Customer Onboarding Communications: Include reminders about the benefits of adding your bank’s debit or credit card to a mobile wallet in all welcome and follow-up communications to new cardholders. When new cards are mailed, use the valuable real estate on card carriers to promote the ease and benefits of mobile wallet usage. When cards are issued in-branch, encourage branch bankers to help customers add their new card to their mobile wallet before they leave the branch.
• Incentivize Card Usage: Offer rewards or cashback for using the bank’s card in mobile wallets. Promotions can encourage customers to make your card their default choice.
• Leverage Data Analytics: Use customer data to predict which customers are most likely to add cards to their mobile wallets and concentrate marketing efforts on these customers. Also consider leveraging insights from mobile wallet transactions to better understand customer behavior and tailor marketing strategies accordingly.

Mobile wallets are not just a passing trend; they are a cornerstone of the future of banking. By ensuring cards are the default choice in customers’ mobile wallets, banks can increase transaction revenue, build stronger customer relationships and stay ahead in an increasingly competitive landscape. Now is the time for banks to embrace mobile wallets as their new “sticky” product and unlock the potential of this dynamic platform.

MKP communications inc. is a New York-based marketing communications agency specializing in merger/change communications for the financial services industry.

Sources/Reference Articles:

¹ https://www.forbes.com/advisor/banking/digital-wallets-payment-apps/