By Andrew B. Morris, CEO & Founder, Morris Advisors, Inc.

Mobile marketing, done well, is a very personal experience. It’s a conversation between the marketer and an individual consumer who has given permission to the marketer to reach them via a very personal piece of technology. The content of the conversation may be personalized as well, based on the consumer’s specified preferences and interactions with the marketer. This dialogue is initiated with a customer enrollment and becomes more effective as information about the customer is gathered, thus enabling more personalization.

Payments are also intensely personal for consumers and, as a result, are critical to marketers seeking to build one-to-one customer relationships through mobile channels. Consumers ‘vote with their wallets’ to respond to the marketers call to action and purchase their products or services. The registration for any new payment product provides a wealth of valuable customer information. And yet, the important relationship between mobile marketing strategy and payments strategy is often overlooked.

What’s in your wallet?

Today, consumers still sometimes pay with cash or checks, but increasingly purchases are made using some form of electronic payment, such as a credit or debit card. Looking to the future, although the plastic payment card remains alive and well, technologies and business models are taking shape which will enable the mobile phone as a payment device. But regardless of whether a plastic card or a cell phone is used for payment, the underlying funding accounts each come with different operational costs and characteristics.

Merchants pay a ‘discount fee’ to banks and payment processors, typically between 2 and 5 percent of the face amount, in order to accept a credit or debit card payment. The merchant discount fee also covers the cost of the rewards points received by consumers using those payment cards. Since the customer registered with the bank for the payment product, the bank controls the costs and the customer relationship.

Other payment accounts, such as gift cards or store credit cards, are issued by the merchant. In this case, the customer registers with the merchant rather than the bank. The processing costs for these payment products are generally much lower (sometimes almost zero) and the merchant controls the marketing conversation rather than the bank. As a result, some of the early implementations of mobile payments in the U.S. market have been by retailers using mobile technology to propel usage of their own gift cards or store credit cards.

An Integrated Approach

Mobile marketers would be wise to consider the role of payments in their strategy, including:

1. How to integrate mobile marketing into the consumer’s experience before, during, and after the payment transaction at the point of sale?
    
2. How to leverage enrollment for payment products to initiate and enhance mobile marketing dialogues with consumers?
    
3. How to leverage mobile technology to increase marketing effectiveness while also decreasing operational costs for processing payment transactions?

For more on the role of payments strategy in your mobile marketing initiatives, contact us at [email protected]