Impacts of Mobile Wallets on Consumer Spending - Coursework Example

Impacts of Mobile Wallets on Consumer Spending (Students Name) (Institution) (Date) Impacts of Mobile Wallets on Consumer Spending Introduction A mobile wallet is a sort of a virtual wallet which stores credit card or debit card information in a digital form. The information is usually stored in a mobile device which allows the holder to have ready and easy access of such information without carrying the physical cards. The adoption of mobile wallets enables a person to make payments using a mobile device such as a mobile phone, tablet or even a smart watch. The information which is always contained in the physical payment card are converted into an electronic form and are stored within the mobile wallet. The mobile wallet app is normally downloaded in the respected device sued such as in the Smartphone. The app is further activated when a person adds his or her credit and debit information allowing such to be used in making payments at any moment. Recently, many companies have advanced into coming up with various mobile wallets expanding its access and use in the contemporary society. For example, this app can be found from Wells Fargo Wallet, Android Pay, Apple Pay, Samsung pay among many others (Hennessy 2005). This paper is particularly concerned in the adoption of this technology and its impacts on consumer spending. The patterns of spending change whenever a person is able to have virtual money instead of the normal physical cash for making payments. Factors affecting and their effect on adopting of mobile wallet in UK Security issues; one of the factors which influence the adoption o mobile wallet in the UK is the aspect of security. Cash is the kind of current asset highly prone to theft. People usually fear for their personal security whenever they walk around with large sums of money. In many cases, people prefer to have the money kept in the bank or in any virtual storage such as mobile wallet to keep them safe. Therefore, many consumers in the UK have adopted the use of mobile wallet for purposes of reducing cash theft as compared to transiting money in cash form (Shin 2009). To control the rates of spending: the other reason behind many consumers in the UK adopting the mobile wallet relates to the desire to have a controlled approach towards making expenditure. Cash is regarded as the most fluid current asset. This implies that it’s highly usable as compared to any basset. Therefore, the easy of making spendthrift purchases is relatively high whenever a person has cash as compared to when a person is using the mobile wallet (Owen & Shank 2011). Convenience: many people especially in the UK have adopted the use of mobile wallet for purposes of convenience. The daily activities with a rational person’s life require several instances of making payments and engaging in purchases. In such situations, people require to have the ability to tract. Cash can easily be finished or even forgotten in many occasions limiting the ability of an individual to have convenience in accessing any product or service at their own choice. Therefore, many people in UK have opted for the use of the mobile wallet due to their convenience (Luciani 2014). How mobile wallets improve consumer spending People’s confidence in mobile payments Mobile wallet has consistently grown to be one of the highly preferably methods of making payments and purchases. People prefer to use the mobile wallet due to their portability characteristics. The mobile devices can be used in any time any day provided the information within these wallets is sufficient. Besides, many people have growing high confidence in the use of mobile wallet due to its convenience. Many people who use the mobile wallet have a great advantage since they do not have to carry with them significant cash to enable them access a service or enjoy a product. A lot of confidence has equally been attributed to the use of mobile wallet in the highly fraudulent market. There are many fraudsters who are present in the modern market and seek to make fortune through fraudulent purchases. Cash has been one of the ways through which such people use fake currencies to manipulate their activities. This has seen a lot of confidence grown in the use of the mobile wallet which is only susceptible to identity theft but not to fraudulent purchases (Boyd 2005). The holders of mobile wallet have equally gained almost of confidence in the security of their money. The use of the mobile devices has promoted high sense of security for people avoiding the risks exposed to carrying liquid cash. Therefore, many have opted to use the mobile wallet and also to ensure that this component of technology replace the possible theft of cash as witnessed in the previous years (Khan 2012). Concerns in Mobile payment The use of mobile method for making payment has immense concerns especially due to the challenges involved in the technological world. One of the concerns of this method of making payment is the security threat concerned with the mobile wallet (Bodhani 2011). The technological infrastructure under which this app operates has become prone to fraudulent users and hackers seeking to steal the identity of other users and also to engage in fraudulent transactions. Concerns have been raised in many instances when an actual owner of the factual information suffers from identify theft from other thieves who end up making huge fusion of money and large payments from their credit accounts. This concern has therefore spread to the reliability of mobile payment as a means of making payments since all parties to a transaction depend on the principles of honesty to deal with one another (Pickens & Richardson 2007). The other concern in the use of mobile payment is the accessibility of the smart mobile devices as a prerequisite to using this technology. The installation and subsequent use of this app requires the installation of the app in a Smartphone, tablet or even in a smart watch. All these modern facilities have cost implications which cannot be accessible and affordable to every person (Caldwell 2012). Therefore, there has been selective use of the mobile wallet that has been left to people who have the ability to afford the smart devices so as to use the application. Impacts of consumer spending in an economy Consumers are integral components of every economy. They determine the patterns of growth and also dictate the movement of money within the economy. In many cases, the economic position is determined by the concept of Consumer Price Index which measures the average prices that consumers must pay so as to survive within the economy. The consumers dictate the potentialities within the economy and also refresh economic investments in every country (Cox 2013). Consumer spending has an impact on the total amount of savings within any economy to a great extent. Savings is determined by the amount not subjected to any expenditure. Usually, an economy with the highest consumer spending pattern remains with little total savings within its basket. The case is equally similar to economies whose consumers have conservative approach towards spending. The total amount of saving will be considerably higher in such economies impacting positively to the overall growth (Vandezande 2013). The other impact of consumer spending into an economy regards the amount of money present in circulation. The circulation of money is an indicator of economic progress of any country. A more stable economy has relatively much money available in circulation as compared to a least growing economy. The extent to which consumers within the economy spend would then reflect on the growth of such an economy (Dahlberg et al. 2003). Effect of consumer satisfaction on the growth of consumer spending Satisfaction is the key aspect in determining the extent to which a person would be willing to buy a product or a service. A consumer who has received satisfaction from a particular product would tend to be loyal and make repeated purchases of such a product. On the other hand, consumers which have received less satisfaction from a product tend to be averse towards such a product (Husson 2015). The satisfaction of a consumer influences their manner of expenditure. A highly satisfied person will have a repeated trend of expenditure ion purchasing the commodities. In many cases, the brand designers and promoters tend to concentrate much on how to build a firm satisfaction so s to have customer loyalty on such brands. A significant growth in consumer spending is seen depending on how consumers are satisfied both with the products as well as with the means of expenditure. For example, the introduction of mobile wallet has simplified the process of expenditure enabling a buyer to have the product or service without necessarily carrying cash. This makes the consumer highly satisfied in using the new invention and further builds high loyalty in the usage of the technology (Jain et al. 2013). Less satisfied individuals within any economy have a more protracted pattern of expenditures. The consumers usually have a conservative approach towards putting their money in purchasing less satisfying commodities or services. Therefore, the total expenditure pattern in such an economy is considerably less as compared to en economy inhabited by highly satisfied users. This brings a g4reat contrast in the effect of satisfaction and expenditure as witnessed in the modern market (Amoroso & Magnier-Watanabe 2012). Technology or e-commerce drives consumer spending Technological innovations and creativity have highly promoted the patterns of consumer spending in the economy. The advancement of e-commerce has made variety of products easily accessible to buyers. For example, the online market has brought variety of goods from different places at the disposal of the consumers. This presents a wide choice of consumer preference to the modern buyer promoting a high pattern of growth. Besides, the online market has made the purchase easier through a click of button. Buyers prefer such easy processes of purchase. Besides, the advancement of technology has led to the introduction of application such as mobile wallet which acts as a virtual wallet. The consumers are saved from the burden of carrying a large sum of cash so as to make any payments (Mangalindan & Vascellaro 2006). The introductions of mobile payments have increased the chances, convenience, efficiency and ease of making payments anywhere the consumer is located. Therefore, many people have enhanced in higher rates of expenditure since they are able to make any levels of payments using the mobile payments means such as the mobile wallet. The outcome is a growth in the patterns and in the rate of consumer spending as witnessed in the economy. Debit Cards increase consumer spending Debit cards have become a suitable substitution of the cash option in regards to making payments and purchase activities. Traditionally, cash was held in its physical form and the requirement to make any payment necessitated the use of physical delivery of cash. However, the introduction of the debt cards allowed for the storage of such cash in a virtual form in the name of debit cards. Further, the introduction of mobile application has made the debit cards changed into virtual forms (Laudon & Traver 2016). People who hold the debt cards have high tendencies of making purchases and expenditure. The spending patterns in consumers holding the debit cards are relatively high as compared to those who have no debit cards. This is attributed to the ease of making expenditures, the convenience of expending and also lack of much pain and care of making much expenditure as compared to a person dealing in cash. A debit card holder doesn’t have much painful feeling to swap the card and make payment as compared to person seeing the removal of cash. Besides, a lot of ease is enjoyed in making payment using the debit cash due to the removal of the burden of holding and handling of cash. This makes the holders of the debit cash have high patterns of spending as compared to consumers with no debit cards (Palumbo & Dominici, 2015). Rewards increase the consumer spending There have been improvements in the use of the mobile payments and even the debit cards in which the service provides award bonuses depending on the frequency and the value of expenditure made. Those who make huge payments and frequent services usually benefit from high bonuses and rewards. These rewards can be use by the holder of the card to make further payments. A rational debit card holder would wish to have as much points or rewards as possible. This need will prompt the card holder to engage in making much spending. Therefore, the rewards and bonuses are prefect ingredients for high spending in the market (Markendahl at al. 2011). Research gap A lot of emphasis has been put on the recent introduction of mobile wallet as alternatives to holding and handling physical cash. The applications have condensed the information within the credit and debit cards. Therefore, there has been a significant ease in making of payments resulting into growth in the patterns of expenditure. Literature exists on the effects of such technology in promoting the growth in consumer spending. In addition, a lot of research has equally been conducted on the consumer tendencies in promoting the use of mobile wallet as opposed to making cash payments (Weber 2007). However, there exists a research gap in the best way to regulate the use of the mobile wallet in curbing high expenditure for purposes of economic stability. Every economy requires stable consumer spending pattern for better economic analysis. However, the liberalization in the use of credit and debit cards that has further been promoted by the use of mobile wallet. There needs to be a further research on the best means and ways to curb on the rise of expenditure patterns since the introduction of mobile payments and the best strategies to help manage the growing trends in the use of such facilities (Hypponen 2006). References Amoroso, D. L., & Magnier-Watanabe, R. (2012). Building a research model for mobile wallet consumer adoption: the case of mobile Suica in Japan. Journal of theoretical and applied electronic commerce research, 7(1), 94-110. Bodhani, A. (2011). Smartphones pay the price. Engineering & Technology, 6(10), 56-59 Boyd, J. (2005). Here comes the wallet phone [wireless credit card]. IEEE Spectrum, 42(11), 12-14. Caldwell, T. (2012). Locking down the e-wallet. Computer Fraud & Security, 2012(4), 5-8. Cox, C. T. (2013). U.S. Patent No. 8,565,723. Washington, DC: U.S. Patent and Trademark Office. Dahlberg, T., Mallat, N., & Öörni, A. (2003). 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Browser Download This Paper. Weber, A. (2007). The convergence of mobile data phones, consumer electronics, and wallets: Lessons from Japan. Telematics and informatics, 24(3), 180-191. Read More