Mobile Payments Take a Bold New Place In Equation

Now that Apple has entered the mobile payments arena, with its introduction of Apple Pay last week, marked adoption is a near-term reality. We’ve got an unfettered view on how mobile payments will likely evolve the industry. While it has been clear that mobile transactions were the imminent norm of the future, the path to arrival has been less obvious.

Now it’s clear as day.

Enter the catalyst of our smartphone enabled world, with their again growing considerable market share. Apple’s significant contribution to the mobile payments game is poised to unlock or ignite the rest of the opportunity at hand.

Although brands have for some time now been using mobile devices to market to consumers, aiming to influence behaviors on screen and drive foot traffic in to stores, the ultimate engagement – the purchase – still primarily happens in-store at the point-of-sale, while consumers are toting their aforementioned device in-hand. In other words, in most cases, they’ve had to put down the device while they pay. Consequently, our ability to fully close the loop on the mobile device has been constrained by this on-the-spot conversion opportunity. That’s just changed.

Smartphones are Central and Mobile Payment Pivotal

Smartphones have been a centralizing force, a rapidly building dominant path, for more and more of what we do on a daily basis, including various shopping related behaviors such as browsing deals, merchandise, reviews, options, and availability. Consequently, considering the transactional and commercial bend of the mobile user’s day, and their unceasing quest for convenience, it’s easy to see that mobile payment is the obvious next step. Growing use of mobile coupons has given us a sneak peak at the benefits for both marketer and consumer. But, full mobile payment is now poised for prevalence, if not the norm, as mobile adoption grows.

As has been noted by industry watchers, adoption will depend on the intersection of customer adoption enabled by merchant adoption, which requires tech enabling their stores to close the loop. Merchant adoption will be driven by customer demand, which must be sparked by merchant availability to realize value, to then prompt the demand. In other words, we need both early adopter customers, enabled by early adopter merchants, so everyone can figure out what works and what doesn’t, and what features matter to whom. Will large-scale adoption be compelled by convenience? Security? How important will features like near field communication (NFC) be in convincing merchants and consumers alike to use the capability? Answer: it all plays a part.

As a frequent traveler, and constant watcher of people, it’s been fascinating to witness the consideration and adoption of mobile travel tools. A year ago, at least on the paths I travel, very few people were using e-tickets on their mobile phones. Fast forward to today, and there is a steady and obvious adoption, including the handful of us who are starting to forget how we lived without it. Pay close attention, and you’ll see notably more mobile phone users in the “frequent flyer” boarding groups, versus the rest of the plane. Sit down on the plane, and show the person in your row how you know the middle seat will remain empty and you get an excited reaction. Point out that you have access to that information because you’re running the airline app, and you quickly hear, “Oh I don’t travel enough to mess with an app.”

However, jump up to first class, and it’s not uncommon to have both you and the person next to you actually purchasing upcoming flights, as the doors for the one you’re on is closing. I believe this will be the same real-world trial we’ll venture when it comes to mobile payment adoption. At what point will it be worth it, and then when will it be better? Like Apple and their significant consumer population influence, we can likely thank Starbucks for early training. Like the frequent flyer line, look across the line at a Starbucks on a busy morning, and the regulars are identifiable by the familiar barista greeting, and the beep of their mobile payment. After all, you’re going to buy the same drink every morning, why would you want anything less convenient than a tap, beep, paid.

As a brand with a brick and mortar location, the question used to be: should I have a website? The question then became: should I have an app? While the app question is still being answered for some, the new question is: should I support mobile payments, or other types of mobile transactions? Yes, why wouldn’t you? Any opportunity you ever lost with the mobile, on-the-go consumer who prefers to execute on-device and keep moving, is now back at your fingertips and theirs. And this opens up all kinds of options for in-store marketing and re-marketing.

If this new tech enabled path to purchase provides value, convenience, respects privacy, and focuses on security in the mobile consumer world, it’s going to work. I am not suggesting every brand run immediately to integrate Apple Pay, rather, recognize the imminence of the concept and begin quickly evaluating your path to entry.

As brands consider when to take action and whether to implement mobile payments, it’s important to take a look at your specific industry, your geography, and your offer, as far how your consumers tend to interact with your products prior to purchase. You take a step back and imagine how the consideration process works, across different touch points, prior to in-store purchase. Would you be providing a convenience and enabling a quicker conversion if they could execute (pay and ship) on mobile? How well do your products align with the idea of fast convenient mobile payment? Therein lies the direction.

Take the first step based on that direction. And then evaluate that with metrics and analysis, specifically on any trends you see around conversion activity in-store vs. device. This will allow you to give mobile engagement and and mobile payments their place within the store experience and continue to tighten your own equation.

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