Retailers dial into a new wireless potential.
At the end of the day, Martin says, consumers do not care what a retailer pays in merchant fees: “For the consumer, it’s about, ‘What value do I get?’ ”
Speaking in favor of the Isis effort and NFC, Tony Abruzzio, business development executive for New York-based Isis, said the technology has its upsides:
- NFC is already a standardized technology that providers can implement immediately, not just here in the United States, but also globally.
- It rides on the EMV system, which is a security technology that the credit-card companies are already mandating in the coming years.
- The demographic is 18- to 34-year-olds who are interested in trying something new, as long as innovative retailers and financial types can envision the kinds of offers that will lure them into using the technology.
Still, supporters of mobile wallets have acknowledged a sluggish adoption rate.
“So why has this disruptive shift in payments never materialized?” asks Seth Priebatsch, CEO of LevelUp, a mobile-payments provider based in Boston. “It’s because these two formulas—one for [a traditional credit] card and the other for Google wallet—are the same.”
With both being the same, no reason to change exists, he says.
“Change is expensive. Credit cards work just fine,” he says. “Change means that merchants, payment processors and credit-card companies would have to bring in new hardware, new training.”
That said, Priebatsch believes that several compelling reasons will keep the march toward mobile payment going. These benefits include:
- Lower payment processing. Mobile is a path to potentially lower processing fees, a concrete trend that could “disrupt rates” as people now see them.
- Access to data. It becomes a platform for a merchant to take back control over his or her customer base.
- Advertising and loyalty. As a larger vision, mobile payment is just a piece of a larger connection to a retailer’s customers, creating a concrete pathway for advertising and the building of loyalty.
As discussion on internal uses of mobile expand, Gray Taylor, executive director for the Petroleum Convenience Alliance for Technology Standards (PCATS), Alexandria, Va., says the mobile-wallet discussion ought to expand to talk of a mobile “briefcase.” As an example, he points to digital coupons. Taking paper coupons for discounted items at the c-store may not be as typical as in the grocery or drug-store channels today, but Taylor believes that with the advent of the mobile wallet, that day may be coming soon.
“[The industry] has to figure out how to handle validity, security and redemption,” says Taylor, who heads PCATS and the technology efforts of the larger NACS association. “We can pilot this thing to death, but we don’t want to be the … last [to implement programs].”
C-store purchases have always been impulse buys, he says. But with much of the activity in a mobile-coupon scenario happening in the “cloud” or at a more centralized computer off-site, a coupon can be in a customer’s cellphone at “the moment of truth,” when he or she is making that purchase decision, he says.
The reason why these benefits have not trickled down to retailers, Priebatsch says, is that a larger convergence of multiple players—consumers, merchants, POS companies, acquirers and developers—has yet to occur. Those groups are now moving more quickly to common ground for various reasons, he says. As an “ecosystem,” Priebatsch says, each of those groups is actively seeing the potential of moving together.