By Stephan Schambach, NewStore
If I told you I stopped off at Starbucks for a latté and took an Uber back to the office, you probably would not be that impressed. It is a normal thing to do these days. Nothing to write home about. Or should that be, “nothing to WhatsApp home about.” But, the fascinating thing about this excursion is the amount of money that changed hands. Exactly zero.
Of course, I paid for my latté and my ride, but neither the barista nor the driver saw any cash or cards. It was all done out of sight, through the companies’ respective apps, and I was left with the singular pleasure of the cashless purchase experience.
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Maybe you think there is no life-changing pleasure in taking a cab or an Uber. But then I think about all the times I have had to wrestle cash out of my pocket while wedged in the rear seat, or experience the hand off of the credit card machine from the front to the back in the dark of night. I can say that stepping out of the cab without having to remove my wallet or sign anything makes me feel for a moment like part of the jet set, and reduces the odds of leaving something behind in the cab due to distraction.
I do not need to feel concern for the whereabouts of my easily lose-able credit card, knowing the details of paying the fare are being handled online by Uber’s computers. When I pay for my coffee, I will actually accrue some loyalty points, and even if I had chosen public transit in place of the Uber car to get back to the office, a simple tap of my transit payment card is infinitely easier than rooting around for change.
The simplicity and pleasure of the instant payment card is tangible, even in these small situations. It will prove to be so in even greater measure once more retailers adopt Apple Pay as a payment option within their own establishments. There are other instant payment systems available, of course. Android Pay, for example. But, as with so much of what Apple does, its cachet is poised to lead the transformation of the retail store from a “box of merchandise with a cash register at one end” to an actual shopping experience where no barrier exists between customer and store, like, well, the Apple Store.
Hundreds of Apple Pay early adopters already exist, including giants like Subway sandwiches, Walgreens, McDonalds, and Macy’s — and this type of momentum only leads to further acceptance.
Although Apple Pay still connects behind the scenes to a shopper’s credit card, the actual elimination of the physical action of paying promises to bring consumers even closer to the brands and the products. It keeps them intimately wrapped inside the experience. As such, it paves the way towards the retailers’ ideal — a frictionless relationship in which nothing stands between a shopper’s desires and a retailer’s delivery.
This has profound implications for marketers and retail store layout designers. Every point on the floor becomes a POS. Every employee becomes a sales associate and virtual cashier, and every item is purchased on spec, rather than all at once at the checkout. Stores will be laid out differently, winning back precious floor space from the checkout zone, and impulse purchase displays can be placed anywhere.
Most importantly, the full value of shopping will be embedded further into the smartphone, something that everyone carries, and holds the key to a completely tailored experience, with suggestions, incentives, loyalty points, endless aisle, store maps, and now, a seamless payment system.
As an added, significant bonus, Apple Pay (and to a lesser degree Android Pay) completely eliminate the fraud issue that comes with using credit cards directly, where every fraudster can take a photo of your card or read the mag stripe to defraud you. In fact, once you activate the credit/debit card in Apple Pay, you could keep the actual card (and its number) hidden away in a safe. Payments would be more secure than ever, and fraud screening would move to a higher level of sophistication, allowing you to even make “out-of-pattern” purchases — like something you have never bought before — while preventing others from doing the same.
The future will likely see mobile commerce apps and payment technologies vanish entirely into the shopper’s body, embedded inside a smart tattoo, lapel pin, or earring, with glasses or smart contacts offering the visual guidance. And, with an ironic twist, the more internal these transaction systems become, the greater the incentive for people to come back out and shop in person, once again.
Stephan Schambach is the Founder and CEO of NewStore. He is a serial entrepreneur with a proven track record of creating and growing successful tech companies in the U.S. and Europe. Under his leadership and vision, he brought Intershop and Demandware to IPOs with multi-billion-dollar market caps. At NewStore, Schambach is setting out to change the market once again, this time by solving the omnichannel problem facing so many retailers and brands. He has won numerous awards around the world for his technology and entrepreneurial leadership. He is also an investor in several software and green-tech startups.
