PayPal may not be the most impartial judge, given the fact the company has launched its own mobile application, but the company is predicting that the days of the conventional wallet may be numbered. With smartphones hitting critical mass, PayPal's David Marcus believes 2014 will be the year that mobile payments start to really take off among consumers.
Here are three of the major changes Marcus believes will come to fruition next year, in large part due to mobile devices and payments:
1. Renaissance of the brick-and-mortar retailer
Major online marketplaces and merchants, most notably Amazon, have been the bane of existence for many conventional retailers over the past few years. Customers could often find the same goods online at lower prices, making it difficult to compete.
Marcus expects mobile devices to be the great equalizer, however. These tools reward merchants that have a seamless shopping experience in place, allowing customers to find nearby brick-and-mortar locations, arrange in-store pickup of items, compare prices, redeem coupons and even finalize transactions via mobile payments. Brick-and-mortar retailers can offer a full shopping experience, engaging customers online and in stores, whereas online merchants only have a single interaction point with customers.
In that regard, it's pivotal that retailers have mobile apps that can help bridge the online and in-store shopping experience with customers.
2. Mobile wallets grow outside of the retail space
Although mobile devices have already become entrenched in the retail experience, that isn't the only place they'll gain more ground. PayPal fully predicts that mobile wallets will become more commonplace for all sorts of payment uses, whether it's paying for a haircut at a salon or loaning friends a few dollars digitally.
To help drive the adoption of mobile wallets, Marcus urges companies to consider digital coupons that can be accessed via mobile apps. This provides customers with more incentive to pay with their smartphones over other established methods such as cash or credit cards.
"This will lead to a flood of new payment experiences built on technologies such as sensors, geolocation and the cloud that will soon make standing in a long checkout line and paying with a card seem like something out of the Stone Age," Marcus told Forbes.
3. Startups drive mobile innovation
The mobile landscape is a brand new arena and established businesses aren't any better off than younger startups. Creating an effective mobile consumer engagement initiative can be a great way for young brands to differentiate themselves from larger competitors while still delivering a personal, unique experience to customers.
This year saw massive growth in terms of smartphone subscribers, from 129 million smartphone owners in January to nearly 150 million through October, according to comScore. This trend shows no signs of slowing, so it's crucial that businesses investigate the various ways they can use mobile devices to better serve their customers.