Hey Payments Industry: Here's How You Can Take Mobile Commerce To The Next Level

customer shopper shopping bags

Shopping today is as close as a touch screen, thanks to smart phones and other mobile devices that create an always-on society.

No laptop? No wallet? No problem. Today’s devices enable consumers not only to find what they want through the mobile Internet but also provide buyers with a way to pay for goods and services directly from a mobile phone.

But for mobile commerce to shift to the next gear and accelerate, payment systems providers for retailers must bear much of the initial costs or merchants will balk – and that could stall adoption faster than water in a fuel tank.

At Mobile World Congress recently in Barcelona, Google CEO Eric Schmidt said that NFC-enabled smart phones – which will empower a dramatic upshift in mobile commerce, mobile promotions and mobile payments – are a “mega-scale” opportunity. Retailers and consumers in Japan and Europe already are living mobile commerce. By 2015, worldwide shoppers will spend about $119 billion on goods and services bought through mobile device, according to ABI Research.

For m-commerce, though, to tip the mega-scale for retailers as a heavyweight instead of a feather weight, industry participants must exercise different thinking than they do now. Emerging mobile payments platforms represent a leap forward in electronic payment transactions, but those who want to claim leadership in the sector must alleviate merchant resistance to the costs of implementing the new infrastructure required for the increasingly complex environment.

The payments industry must consider the following tips if m-commerce is to rise to a higher zenith:

Subsidies For Retailers: Deployment and management of complex NFC technologies will require significant ongoing services from the retailer’s payment systems provider. Point-of-sale becomes the hub of systems complexity but the costs of deploying and managing all of this new software should be borne by the new service provider who stands to gain the most. Retailers will not invest in good faith.

Decidedly Different Consumer Experience: Tapping a phone is a gimmick, no different from tapping a card or fob. In order to convince shoppers to leave their wallets at home, service providers and retailers must go beyond providing the ability to pay by phone – they must provide added value to the consumer such as coupons, loyalty rewards and discounts.

Unified Point Of Sale: Retailers won’t tolerate the need for multiple methods of acceptance to accommodate what will become a wide array of mobile commerce schemes. All ideas, regardless of who generates them, must converge at a unified point-of-sale that is already integrated with other store systems and bank networks.

Mass Consumer Adoption: Mobile commerce must go from zero to 90 mph in five seconds. Consumers will not confidently embrace mobile commerce unless it is widely accepted. If it only works at Starbucks, it will die quicker than a cell signal on a two-lane country road. 10 per cent acceptance is unsustainable.

Chorus, Not A Solo: Plastic cards won’t disappear anytime soon. Hence, mobile payments must work with other forms of payment and existing payment systems that are certified by all major processors and installed in the vast majority of retailers.

Safe, Secure: :Even minor setbacks in security, real and perceived, could compromise consumer adoption and stop the movement in its tracks. Billions have been spent securing the existing payment ecosystem so new entrants must play by the same rules.  

The retail point of sale represents a point of convergence for smart phone-initiated payments, social networking and electronic couponing, but it won’t happen if retailers are expected, on faith, to absorb the costs of making it work.

This isn’t just an issue of adding an NFC reader. Expert implementation requires deep software richness at the point-of-sale to interact with the smart phone and manage a services-based model encompassing new applications and deployments without disrupting operation of existing card systems.

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