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Connecting the Dots: Loyalty, Trust and Mobile Wallets

Sabrina Tharani |

The loyalty game is something marketers have tried optimize for decades. I’ve read hypotheses ranging from affluent preferences to brand power to rewards, but there is only one variable I find to be universal among all the discourse: trust.

In a recent MasterCard study, Global Insights found that trust is a key variable in online and mobile commerce. In fact, 62 percent of global consumers will only share details about themselves with large, well-known and respected companies.

This means that alongside shopping, browsing and online banking, the “trust factor” will play a critical role in all innovative product development

Take the wallet – which I think has more theories than loyalty (read here, here and here) – for example.

Digital wallets – MasterCard’s own, or one of the many reported currently being developed – have the potential to provide great utility to both the consumers and merchants who use them. Wallets will enhance verification and reduce fraud rates, allow for better money management and optimize reward redemption—all while driving towards a cashless economy.

The adoption problem? Besides willingness, which, we learned from the Mobile Payments Readiness Index, is key to mobile payments, is perceived lack of trust. Consumers aren’t sold on the value proposition of wallets, and express worry regarding the security of their cards and personal information. However, at the same time we know from several studies that consumers are generally more trusting of banks and financial institutions than of the other firms they interact with online.

Mainstream adoption of wallet services becomes an exercise in connecting the dots: in the case of providers like banks, networks, large retailers and technology companies, trust and respect for the brand is already ingrained. This is emphasized in developing markets, where consumers place a greater importance on brand and labels because they inherently relate that with quality and trust. What’s missing is trust in the product. Marketers must find a way to leverage the power behind their brand to strengthen the value and perception of what the brand represents: their products and services.

A recent GfK study found that once consumers find a brand they are satisfied with, they usually won’t experiment with new ones. The same will be true with wallets. Once consumers choose and sign on with a service, they are unlikely to switch. In this new game, loyalty means trust, and those who earn it first will be the ones who succeed.

Topics: Mobile, Payments Strategy

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