Who would have thought that the day would come when the wallet would be rendered obsolete? But along with the day planner, watch and calculator, it’s happening. For some time the era of mobile payments has been closing in and very soon the mobile wallet could be making its grand debut.
Since the advent of mobile, retailers have been keeping up with the latest advancements in mobile technology and the corresponding fluctuations in consumer behaviors. It’s a challenge, but with an innovation like mobile payments, it’s also an opportunity to enhance the customer experience and expedite the checkout process. Something that all retailers strive for and consumers expect.
In thelast decade we’ve seen the evolution from SMS/USSD transactions, to direct mobile billing, mobile web payment (WAP), direct operator billing and mobile barcode technology. And this year, there has been serious talk from a number of industry stakeholders announcing their plans to explore near field communication (NFC) technology.
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Starting this year we will begin to see the roll out of a number of NFC technology systems, as players such as Isis, Google, and others begin to develop NFC networks with the hopes of partnering with the countries’ leading retailers to bring this new technology to checkout lines across America.
While the mobile payment option is a great opportunity for retailers and one that many are eager to explore, most will tell you that they are not taking the decision lightly. As with any new tool, it’s going to be a process, one that has to be crafted, tested and perfected. Additionally, there are other technologies that are being explored by retailers in addition to NFC such as the mobile barcode.
Exploring The ROI Of NFC
Some retailers are starting to test the waters by rolling out pilot programs in select areas to see the real time results and gauge value and ROI. Best Buy for example has been trialing the use of NFC stickers and Starbucks is using barcode technology through a mobile app. Then there are those retailers that are taking a more conservative approach, weighing their options and carefully considering the cost benefit analysis before they press forward with any kind of roll out.
Moving ahead with NFC technology for example, will mean considerable capital investment on the part of retailers. They will have to put readers in all of their locations and we’re not talking one or two stores, we’re talking hundreds of thousands of store. There is also hardware and supporting software to think about.
Additionally, there is a cost to retailers to accept these new payment systems. Retailers have learned a great deal from their experiences working with current electronic payments markets. It’s no secret that retailers dislike existing payment networks and think they are much too expensive.
With the creation of these new mobile payment networks retailers know there is potential to save money. Merchants will be looking for something that will honestly compete with the existing payment networks, one that will be cost efficient over a long period of time and one that will foster a competitive environment where there will be incentives for costs to stay down.
So what exactly the end product is going to look like is anybody’s guess. As the technology and the networks emerge, retailers will be eager to see what the best option is, how it will enhance the customer experience, where they can save money, and how those savings will persist over time.
In the end, mobile payments will be mainstreamed if retailers decide it is so. Partnerships will be formed and programs adopted based on the best possible product and service network, one that appeals to consumers and merchants and earns the stamp of approval by America’s leading retailers.
More insights from Chroust can be found on TouchPoints TV.
