Mar 22, 2013 Dave King
In today's payments industry, the traditional credit card terminal has begun to seem like a relic of a time gone by. More consumers are foregoing the option to pull out their plastic in favor of waving their smartphones or presenting a QR code on their tablets. As options for near field communication (NFC) get more advanced and users turn to them with increased frequency, retailers need to jump on board with mobile payments and marketing if they want to stay competitive.
Mobile payments feed a need
Some companies are already seeing significant benefits to supporting NFC transactions. According to IT news source Computing, sandwich chain Pret a Manger was one of the first retail locations in the United Kingdom to support contactless payments, and the company is seeing major growth now that the movement is picking up speed. Pret a Manger director of IT, delivery and support, Andy Chalklin told the news outlet that his business has seen mobile payments grow 15 percent or more in the past year alone.
While Chalklin said that not many patrons were using contactless methods in 2012 and earlier, now that usage is becoming popular he has seen gains in sales. He attributes the business directly to offering alternative payment options. And with increased sales come increased profits, especially with cost-effective technologies like mobile.
"As a retailer it is faster, it is a guaranteed payment methodology; it is not subject to charge-back from the acquirer, it is accessible as people forget their wallets at home but not their phones," Chalklin explained. "And, from a retailing perspective, it is cheaper at the moment; it is 50 per cent of the interchange rate of any chip-and-pin transaction."
The U.K.'s foodservice industry is far from the only one that is likely to benefit from harnessing the power of electronic payments. Mobile Commerce Daily reported that a recent study from marketing firm BlueHornet found many consumers are also eager to use their smartphones to make purchases via their online mailing service. According to the report, 63 percent of consumers would buy a product offered over email directly from their mobile device, but slightly more than 80 percent would delete the message if it wasn't optimized to suit the platform. Among the respondents, 30.2 percent would even go as far as to unsubscribe from a service that sent an un-optimized email.
People are eager to use mobile payments technology, but the right packaging is essential. The report's numbers indicate that many tech-savvy consumers have dwindling amounts of patience for companies that refuse to bring themselves into the 21st Century. Failing to offer NFC payment options and expand sales and marketing efforts to the mobile frontier could take a serious toll on businesses. The public expects retailers to keep up, and those who don't will lose their credibility.
Despite the popularity of mobile tools, many vendors and developers still have progress to make in the realm of data security. As consumers use apps and other solutions to make contactless payments, they are likely to be storing some sensitive information on their mobile devices. If lost, this data could pose serious risks to their identities. In some cases, when thieves steal credit card account numbers, they make poor credit decisions in another individual's name, which can take a toll on the true data owner's consumer credit report. Though customers should make smart choices about the apps they use, opting for ones that offer more comprehensive safety features, it is also the responsibility of those facilitating transactions to take action against identity fraud.