• Telcos are losing out to nimble competitors in the mobile wallet field
• It's a familiar problem: telcos not asking customers what they want
• Loyalty cards are key, says one report

All manner of opportunities are being lost to mobile operators because they haven’t bothered finding out what their users actually want from their mobile wallet services. That’s according to an Ovum Survey commissioned by Amdocs which set out to get some insight into what was going wrong with the mobile wallet market and, presumably, why operators weren’t getting a bigger and better share of it.

You remember the mobile wallet? That was one of the big opportunities for operators to insert themselves into an appropriate value chain - they had the customer billing relationship, they sold (usually) the smartphones, they had trust. This was surely a tailor-made chance.

Except it hasn’t happened. As we reported last month (see - Has the Mobile Wallet slipped through telco fingers (or was it always a non-starter)? the field has boomed and is now worth $1.35 trillion, but it’s being driven from Asia by online players such as Alipay and WeChat, with Apple and Paypal coming up on the rail. According to Juniper Research the network operators have tended to stick to offline payment with NFC SIM cards while their competitors’ technologies allow their wallets to to be used both instore and online means that these wallets are fast becoming the default payment mechanism.

According Amdocs and Ovum, there are other outstanding problems too - and these are more cultural than technical. The Amdocs' survey focused on banked and unbanked users of Mobile Financial Services (MFS) worldwide. It surveyed 1,800 consumers and 42 service providers across 9 countries in emerging and mature markets including the United States, Singapore, Russia, Brazil, Indonesia, Mexico, the Philippines, Bangladesh, and Vietnam. It found that MFS providers just weren’t getting to grips with the concept of ‘loyalty programmes’ and how these can be understood and used as an on-ramp to mobile wallet services.

Loyalty cards, it thinks, are key. “MFS providers who employ loyalty programmes to engage and retain customers are better placed to increase usage and adoption of their mobile wallet service, thereby driving revenue growth,” said Eden Zoller, principal analyst at Ovum.  The loyalty programmes are, in a sense,  the trainer wheels for the mobile wallet because they can be used to build familiarity around the ‘online’ concept (it’s easy to underestimate just how difficult these things are to grasp if you’ve not had much exposure to the ultra abstract world of online).  At the same the loyalty programme builds trust between the customer and the operator.

And, claims Ovum, operators will be pushing at an open door if they got their approach right.

“ A significant gap exists between what customers want and what they are offered,” explains the researchers. “This is especially true for unbanked users: 80 per cent are not enrolled in any loyalty programme. The findings also reveal a lack of awareness of the types of loyalty programmes being offered.”

• Ability to manage multiple loyalty cards using a single mobile wallet is the most important feature—but not well supported by service Key survey findingsproviders: The overwhelming majority of respondents consider it very important (61%) or important (34%) to be able to manage different loyalty cards via a single wallet. However, only 33% of service providers offer this feature. The other important feature that consumers want is the ability to share loyalty points with friends and family. While 46% rated this feature as very important and 42% as important, only 21% of service providers support this. Younger respondents (aged 16-24) showed even more interest, with 51% saying it was very important and 40% rating it as important.
• Tiered loyalty programmes drive greater mobile wallet usage: Only half of service providers offer tiered loyalty programs. Of these, 79% said that the prospect of earning higher tier points incentivises customers to use their services more. Consumers however, still lack awareness of such programmes, with 19% saying they didn’t know if their loyalty programme was tiered.
• Consumers like to accumulate loyalty points to purchase products and services or to receive cash discounts; cash backs on purchases or vouchers for free purchases: While overall, consumers are receiving the rewards that they like, gaps still exist. Although there is a marked preference for cash back (41%), this type of reward was not available to one-third of respondents. The same holds true for vouchers, where 30% wanted to receive such rewards but only 22% were offered them.
• MFS-linked loyalty programs represent a highly untapped market: 56% of respondents were not members of an MFS-linked loyalty program. One-third of these were not offered any such programme. Of unbanked respondents, who stand to benefit most from MFS-linked loyalty programmes, only 22% said they were registered to one.

Amdocs, of course, is there to help. It’s launched a solution to enable service providers to integrate multiple loyalty programmes into one wallet, plus an MFS Loyalty Management System so that MFS providers can integrate loyalty programmes and cards from various retailers, merchants, billers and so on into one mobile wallet.