More incentives needed for mobile wallet useage.

The trick to driving mobile wallet adoption may rest in coupons, discounts and loyalty rewards, according to new data from Javelin Strategy & Research.

The San Francisco, Calif.-based research and advisory firm released a report this week finding that although adoption rates have somewhat plateaued overall for mobile wallets, merchant wallets are the most widely adopted among consumers for payment at the point of sale.

Javelin Strategy & Research said the research calls into question the wallet as a payment method, but it also found that some features do make mobile wallets more attractive to consumers.

"In the rush to market, the main wallet value proposition, paying at the POS, wasn't particularly compelling. In reality, loyalty and rewards will drive adoption, something merchants are doing particularly well," Javelin Strategy & Research Director of Payments Krista Tedder said. "Nevertheless, third-party wallets can and should compete. A large group of consumers are primed to make the jump to in-store payments, and a feature-rich mobile wallet stands to gain a larger share of their spend."

The study found that 71% of mobile-commerce-only purchasers, classified as smartphone users who have purchased things through a mobile browser or app but have not made in-store mobile purchases, said receiving coupons or discounts from merchants was the most appealing feature in a mobile wallet. For "mobile power purchasers," that number was 76%.

"While overall mobile wallet adoption rates have been relatively stagnant, merchants have been leaders in delivering the type of wallets consumers want — namely, wallets focused on loyalty and rewards first, payments second," the study noted.

At least half of mobile-commerce-only users and more than two-thirds of mobile power purchasers said they considered seven other capabilities as top features in mobile wallets: the ability to use their store loyalty or membership cards; the ability to track and redeem reward points; the ability to view account balances before making a purchase; storage of store e-receipts for purchases; the ability to use the wallet as a ticket for mass transit, concerts or sporting events; the ability to move money between accounts to pay for a purchase; and the ability to pay at the store or at checkout.

Forty percent of mobile-commerce-only users and 62% of mobile power users said another top mobile wallet feature is the ability to use the wallet as a key to open a door at home or at a hotel.

Statistically speaking, mobile-commerce-only purchasers respond much more positively to potential wallet features than average consumers do, according to Javelin Strategy & Research.

"Targeting this group with the right features…will be critical for issuers and third-party wallets to deliver an experience on par with that of the merchant," it said.

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