Retail’s Next Big Trend: Mobile Payments

by Shantia Dobson

According to Business Insider, a mobile payment is defined as “the use of a phone or tablet to enable an in-store transaction, whether on the merchant or consumer side,” and it is becoming more convenient every day.  So much so, that consumers will no longer need to carry their wallets with cash or credit cards to make payments – all they’ll need is their mobile phone.  The Business Insider article  “Mobile Is Poised to Upend the Payments Industry,” published last year , elaborated by stating that consumer uptake has exploded: “Smartphone’s are quickly adopting mobile wallets, payment apps, and QR- scanning apps to facilitate offline and online purchases.”  And it looks like these insights were in fact accurate. SFGate published an article in March explaining that “traditionally consumers paid with cash or credit card, so the only way for retailers to track buyer habits was to hand them a separate rewards card—rewards cards that were jammed into overstuffed wallets or forgotten at home.”  I don’t know about you but as a consumer I can definitely relate, as my wallet is usually stuffed with receipts from retail stores, and food purchases. And I cannot begin to tell you about the amount of rewards cards that I’ve been offered, and have misplaced, or did not remember to place inside my wallet on my way out the door.   So what are the benefits of being able to make payments with your mobile phone?  Well, mobile payments remove the inconvenience of carrying a separate card, reduce transaction fees, increase consumer discounts and enable retail brands to track consumer activity.  This means consumers will be able to now make mobile payments on the go. In addition, businesses will also benefit from this new tactic as they’ll be able to track the shopping behaviors of consumers in a more tangible way that is both paperless and without plastic. As the article references, Starbucks is already in front of this next big trend in retail, as the brand has not only transformed the coffee industry, but  is on the verge of transforming retail through the use of the Starbuck mobile payment application. The application incorporates its rewards program and automatically tracks customer’s stars and card balances. It’s most beneficial feature, quoted by Starbucks, is that the mobile payment app “allows Starbucks to monitor and analyze customer behavior –whether those customers are buying a latte at a Starbucks location or buying packaged Starbucks coffee at a grocery store. This information allows us to give targeted discounts and rewards in an attempt to forge new habits.”  Eventually, the app is rumored to enable customers to order and pay for their beverages before they arrive to the store: no line, no plastic, and no fuss.  Though this seems beneficial to busy professionals who need their coffee on the go, it could potentially create a problem for customers who don’t use the mobile payment app and instead watch as one by one they are  skipped in line by those picking up their mobile orders. Or is this a strategic move to further incentivize all Starbuck customers to get the app? 11% of Starbucks payments are already being made with mobile devices, and it’s only the beginning of the mobile-payment era. MasterCard is another major brand to implement mobile payments. Last year, MasterCard launched a new application for iOS and Android called QkR, available for iOS. The app is able to scan any QR Code that a user may find. This feature is critical, as QR Codes have become more popular over the years and their use helps facilitate mobile commerce. With the QkR app, when a user scans a code they’re taken to an “interactive list” that’s connected with whatever venue is sponsoring the code. The user can then place orders of the products they’re most interested in and have them delivered to the proper location – all within the app. So not only is the app providing users with info on products they’re interested in, it also prevents consumers from having to wait on long line, which is especially useful during the holidays and at sporting events. The major take away is the relationship between retailers and consumers. Retailers want to better service their consumers by understanding their shopping habits, and consumers want retailers to better know their shopping preferences.  And in an age of big data, consumers are willing to share some  personal information if it means that retailers can provide them with more relevant offers and personalized messages. At ScanLife, we are well aware of the value of consumer insights, and with our powerful analytics tools combined with the ScanLife Mobile app, our app consumers gain valuable access to relevant discounts, coupons, rewards and information that they are most interested in, and ScanLife retailers and brand customers get to deliver messages to these individuals that have expressed such interests. So how much do you think your brand could benefit from interacting with mobile shoppers through mobile apps, mobile campaigns and now mobile payments?