With the increasing competition, mobile wallet providers are developing new and innovative strategies for building customer loyalty, staying ahead of the competition, and to boost growth. The ongoing pandemic has created large opportunities for mobile wallet providers however consumer retention is expected to play a key role in their growth in Q4 2021. Therefore, PayNXT360 expects mobile wallet providers to focus on their customer retention strategies over the next three to four quarters.
Mobile wallets are launching co-branded products to boost customer loyalty
Mobile wallets are entering into a strategic partnership with large payment service providers such as Visa and MasterCard to launch co-branded credit cards aiming to boost customer loyalty. These co-branded credit cards are offering various offers such as cashback on every transaction made through the wallet. Additionally, these credit cards are offering loyalty programs that are likely to help companies to retain their users.
For instance, in November 2020, Paytm announced its partnership with SBI Card to launch the Paytm SBI co-branded Credit Card. Available in two variants, the mobile wallet has launched the SBI Card SELECT and SBI Card credit card on the Visa platform. By coupling the SBI credit card with its smart app features, the digital wallet is aiming to provide superior rewards and benefits for its users to build loyalty. Thus, enticing users to keep using their mobile wallet for rewards and cash back every time they transact.
In a similar strategy to boost customer loyalty, Line Pay partnered with Visa to launch its co-branded credit card in Japan. Through the co-branded credit card, the digital wallet offered rewards such as LINE points for every transaction done through their platform using the LINE co-branded credit card.
Wallet providers are partnering with major players across industry verticals
For providing their customers with the best experience, mobile wallets are partnering with major players across different industry verticals through their loyalty programs. For instance, wallet providers are integrating various services such as travel, food, shopping, video, and music, to name a few.
For instance, in 2020, Paytm launched its loyalty program, Paytm First, which has been specifically designed for users to gain benefits and rewards. Under Paytm First, the mobile wallet has partnered with various brands to offer its customers irresistible rewards. The Paytm First program is all about freebies and goodies. Through its loyalty program, the wallet provider is offering free subscriptions to other services in the food and entertainment industry among others.
Flexible payment options are giving a competitive edge to mobile wallets
Customers are increasingly looking for flexible payment options to improve their purchasing power. Therefore, flexible payment option such as buy now, pay later (BNPL) is gaining popularity among digital wallet providers. BNPL enables mobile wallet providers to offer easy access to credit to their users.
In August 2020, PayPal announced the launch of its buy now, pay later service, Pay in 4. With merchants getting paid upfront and customers getting better access to credit and higher purchasing power. In April 2020, Amazon Pay also launched buy now, pay later services through its Amazon Pay Later services in India. Similarly, in November 2020, Paytm also launched buy now, pay later services for its users in India.