The Monetization Rush For Mobile Payment Apps

By Amy Vale

As people trade in their older, clunkier mobile phones for sleeker, more advanced Smartphones and tablets, the number of benefits to their lives increase exponentially. That can be said for the mobile shopping experience, with the percentage of mobile shoppers who are Smartphone users jumping from 75% in 2010 to 93% in 2011. With this up shift in mobile use, so does the need for retailers to create a seamless shopping experience for their customers, both offline and online. As retailers rush to adopt mobile-first strategies, we’ll likely see the release of more mobile payment apps to cut down on time shoppers spend waiting in line at their stores, much like the one launched by Carphone Warehouse last week. But how (well) will publishers and app developers cash in on these mobile payment apps?

We already know that consumers aren’t as frustrated or averse to seeing mobile ads, as we once thought. In fact, the Interactive Advertising Bureau reports that 76% of mobile commerce users used their mobile devices in the retail store, and 22% of mobile commerce interactions were driven by a mobile ad. To monetize mobile payment apps, it’s not enough for publishers and app developers to simply make the decision to develop in-app ads. If publishers and app developers want to see those ads drive a significant portion of overall revenue, they must embody, respect and enhance the overall user experience. And that may very well mean abandoning banner ads and pre-roll. Instead, in-app ads for these mobile payment apps must tell a visually interactive, compelling and relevant message to users. For instance, if a regular JC Penney customer is using their Smartphone to play a gaming app, they’ll be more responsive (and interested) in interacting with an ad that says: “Interact with this JC Penney ad and receive 5 free power-ups.” What this means is that delivering the right in-app ad at the right time can effectively increase the number of clicks, impressions and revenue that publishers and app developers see. For mobile users, it’s a win-win situation because they not only get to enjoy playing the gaming app, but they’re given ads that are both interactive and relevant to their needs (super gaming users want more power-ups). For publishers and app developers, being strategic in the types of ads delivered to Smartphones and tablets will ensure greater ROI and revenue.

To top it off, just last week a group of 14 merchants including Wal-Mart Stores Inc., Best Buy and Target Corp. (calling themselves Merchant Customer Exchange, or MCX) announced plans to create a mobile payment app that would give some of their competitors a serious run for their money. In addition to creating a convenient and seamless shopping experience, the payment app plans to integrate ads offering personalized deals, promotions and coupons to customers.

The reality is that there is a systematic cultural shift happening in retail – consumers are coming to assume mobile, from full-featured apps to mobile websites, will be a large part of the shopping experience. It will not only assist shoppers in getting the right information, products and services before they arrive at brick-and-mortar stores, but these new technologies will also simplify and improve the in-store shopping experience tremendously. So the important lesson here is that publishers and app developers need to custom-build and design in-app ads that are innovative and interactive, without interrupting the overall user experience.