There is a race to the finish line in retail right now with everyone vying for the market leading place. Retailers, telecommunications companies, financial institutions and even Google are all trying to get a slice of the Mobile Payment technology pie. But who is going to crack the market? The debate is raging and will the future platform used be open or closed?
Societies rising use of mobile phones means retailers have to have a mobile strategy. The truth is the future of retail is online and without doubt the future of online is mobile.
To start with retailers need to ensure their web store has a mobile friendly storefront & check out – it just might be the first contact a shopper has with your business and first impressions count. The next goal to hit is to take the next step toward a cashless society via technology and let your customers use their mobile devices to pay for their goods in store with ease.
It is critical for retailers to use a Point of Sale system that will be readily able to adapt to this turning tide in payment technology. When you choose a supplier for your POS software make sure you are going with a company that is looking ahead.
Things are already moving forward in the US. At Starbucks, customers are now able to pay for their expresso by holding their mobile phone in front of a scanner. JCPenney staff are using iPod touch screens to offer a mobile POS system that can access customers anywhere on the store floor.
In Australia PayPal lets customers pay with their mobile using their PayPal account. The (NFC) Near Field Communications chips are already built into many mobile devices ready for the day swipe & go technology becomes the norm. Recent studies in the US show that 84% of Smartphone shoppers already use their mobile in store to assist them to shop for a variety of products. Paying at the counter with your Smartphone is the next leap forward although at present who is going to best master this new technology & how fast consumers will respond to this change remains unclear.
The Mobile Payment War – Open Vs Closed
So who is going to move mobile payments into the mainstream & who is going to profit the most?
It’s too early to tell which platform will dominate, but there are different advantages for both open & closed. To get back to basics – open source is a program that is freely available for use at no charge – often code in these programs is improved collaboratively by programmers who freely share their upgrades. Open source is the way the technological community fought back against corporation owned proprietary software.
With closed loop mobile payments retailers can cut out the middleman completely but do large retailers have the skill and funds to reinvent the payment industry – rather than focus on what they do best? Some large scale retailers are seeing the opportunity to take ownership of this technology and minimize costs by dealing directly with customers without the third party retail institution of yesteryear.
MCX – Merchant Customer Exchange is a closed- loop mobile wallet currently being built by some of the biggest retailers in the world but till it gains a foothold as a popular payment method with consumers – there is the opportunity for retailers to enter the market with their own mobile payment apps. This is further backed up by a widely regarded distrust among consumers as to the security a mobile wallet provides.
People may be confused right now about this switch to mobile payments but we are very comfortable with merchant apps. One outcome may be wallet providers supplying the back end functionality behind the scenes so retailers can offer their own mobile apps with payment capabilities. This would offer a better solution as the wallet infrastructure could supply the customer’s payment credentials. Expecting consumers to install & use multiple apps & solutions as well as top up funds in separate solutions used by each retailer for future mobile transactions is inefficient & unreasonable. No one is going to want to enter their payment details with every app they download – simplicity is key.
With open source technology, we could access one technology, one solution on a large scale growing in functionality and value for the customers that choose to use it. Currently we are seeing a lot of fragmented separate solutions like Google Wallet, the Commonwealth Bank’s Kaching and ANZ go Money – but so far nothing with the scale big enough to bring mobile payments into the mainstream. In time though – mobile payment technology will surely provide consumers with a much more efficient, faster service in line with our societies increasing desire for simple solutions and immediacy.
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