Friday, April 13, 2012

Mobile Payments: Is it Really the Future?

After attending today's Mobile Cluster Seminar, we can safely answer the question above as Yes, it is the future. And in fact, it is the present. But it's not focused on the payments, but rather the entire retail experience, pre- and post-payment. That is where incentives come into play and therefore that is where adoption will be had.

The program kicked off with some very interesting research findings from our moderator, Teresa Epperson from Alix Partners. The research shows that the use of retail mobile apps is increasing, in fact 30 - 50% of smartphone users 18 - 54 use in-store mobile shopping apps, and it is having a significant impact on retail and pricing. This is resulting in a number of large retailers turning into show-rooms where consumers can view the products, compare pricing and buy cheaper elsewhere.

Our panelists for the day included, Dekkers Davidson from Barclaycard US, Chris Gardner from Paydiant, and Damien Balsan from PayPal. While there was certainly some lively debate happening with the audience and panel members, our panelists were all in agreement that there is tremendous opportunity and some very compelling reasons that the mobile wallet is here to stay.

Chris began by stating the issues surrounding mobile wallet are not related to technology but to the business. There needs to be economic incentives for both merchants and consumers. In terms of merchants they need to see an increase of transactions, an increase in lane speed, and in some instances access to hardware either at very little cost or no cost at all. For the consumer, they need to be incentivized through loyalty programs, online coupons and other savings initiatives.

Dekkers not only agreed with Chris but added that customers need a connection to merchants and a good way to do this is through community. For instance PayPal was able to utilize the EBay community which helped pave the way for their success. To date, there has not been a compelling community in the US, which will likely change as retailers build these programs out.

When the topic of user experience was broached, all panelists also were in agreement that the user experience would likely continue to be "ugly" for some time and for that to improve technologies and offerings must become "brutally simple".

Damien, an advocate for NFC and involved in the mobile payments space for over 15 years, feels that the shift to the mobile wallet is going to accelerate over then two to three years with improved connectivity and hardware. In addition, consumers will have the ability to set preferences for their mobile payment apps optimizing their experience.

The main take-away is that the mobile wallet is here to stay and therefore there are a great many opportunities right now.

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