Global Mobile Wallet Expansion Foreshadows Checkout Consolidation

The pace of recovery has been inconsistent worldwide, with widespread vaccinations opening up the doors to life on the outside in places like the U.S., while slow distribution and the rapid spread of the Delta variant is keeping others on lockdown. That unevenness has had big effects on verticals like international travel, and as Citcon CEO Chuck Huang told Karen Webster, that is likely to hang on for much of the rest of 2021.

But while things remain slow in some segments, others, such as retail, are speeding up rapidly. The merchant side is moving aggressively, Huang said, especially when adopting new payment methods. It’s a reality in the U.S., where Citcon’s business is focused, but also around the world. Over the last 18 months, eCommerce merchants have dramatically globalized their market outlook and looked to modify their payment offerings for a much wider range of consumers.

The pandemic forced eCommerce expansion on merchants, who realized that expanding to an international audience was possibly their best bet if they wanted to push their products and services. And those merchants, Huang said, are thinking increasingly big when it comes to how far they want to spread.

“For example, just a couple months ago, I talked to eCommerce companies that had the collection of payments from 40 different countries as a goal. Now, their roadmap is to go after collecting payments from 68 countries to continue to expand,” he said.

That expansion, he noted, will accelerate the use of QR code payments online as a safer, smoother tokenized option that merchants want and need to adopt. Merchants will focus on the mobile wallets they want and need in an environment where it can feel like a new one opens up every hour, presenting point of sale (POS) options online and off that are smart enough to present the short list of options consumers want to use.

The Coming Online QR Expansion 

As merchants look to expand into 60-plus nations, Huang told Webster, it directly pushes QR adoption — because to transact in a new nation, they need to support local wallets, as card penetration is low in many markets. They use QR codes when shopping online and in-store.

And while QR codes as an in-store method are increasingly familiar in the U.S., Huang explained, shoppers by and large aren’t seeing QR payments offered as a method when they shop online. That’s because when a website recognizes that a customer is logged in from the U.S., it is “smart” enough to know that they aren’t likely looking for a QR-based method. When the same site sees a shopper using a VPN or logging in from Asia, on the other hand, it may well offer a QR option. But just because U.S. consumers aren’t seeing them today doesn’t mean they never will, noted Huang, as QR is starting to get a real foothold in the market.

“In the U.S., you get an experience of this kind of wallet in the in-store environment first, but once you move to a website, if you have already used it in store, they’re going to display QR for you,” explained Huang. “Then you can scan it and it actually comes pretty naturally.”

Natural for the consumers and beneficial for the merchants, who are no longer putting their conversion at risk by forcing the consumer to sign in or enter a card number to pay. Those additional steps and additional friction layers can send consumers scurrying for the exits, leaving their carts abandoned.

That’s why QR online is taking off — and widely, said Huang. Citcon is already talking to the “expected” players — Amazon and other general eCommerce firms — about how they can bring QR codes, and the many alternative methods of payments attached to them, directly to their platforms, he noted. But Citcon also sees interest in less obvious places.

“In Las Vegas, MGM, which runs Caesars Palace, is working aggressively to enable QR, because the nature of their business exposes it to international consumers,” Huang said.

A Widening Variety Of Mobile Options

The increased widening of the mobile wallet landscape, he said, will mean more than just an uptick in the adoption of the QR code methods. It will also mean different types of mobile wallets becoming prominent, including buy now, pay later (BNPL) wallets or crypto wallets.

Coinbase has tens of millions of users who might like to pay with their crypto holdings, but only about 10 percent use the card product they have attached to the wallet to make those payments possible, noted Huang.

Citcon has no problem integrating that card product and can also help merchants and consumers by providing alternative rails for the merchant with a direct integration experience, Huang added.

And that explosion of mobile alternatives will create more diverse consumer behavior — in much the same way that consumers now have about five card-based methods with which to pay, the mobile future will likely see a similar diversity in methods.

That means gateways will have to make sure they are offering merchants the maximum range for options. To meet consumers’ needs on a mobile basis, merchants will have to be smart and selective in what they offer on the checkout page, ensuring that it’s in line with consumer needs. That might include general mobile wallet options like PayPal or Alipay, crypto-wallet access and a BNPL offering or two up for grabs.

That isn’t the same as the crowding one would see if they attempted to offer all 500 possible mobile wallet entries on their checkout page — but it can start to get crowded, particularly with the number of payment methods proliferating per region. Merchants, Huang said, will have to be selective in what they offer and smart about putting the right options in front of the right customer.

“It’s not going to be a single “winner take all” on the buy side,” he said. “There are buy now, pay later wallets. There are crypto wallets. And if you add them up, you’re still talking about moving to accept five to 10 mobile wallet offerings, at minimum. It’s important to be sure they are the right ones for the audience and the market you are trying to reach.”