Retailers dial into a new wireless potential.
Cities and municipalities are also looking at prepaid in the area of public transportation, among the reasons being to reduce the cost of handling coins and paper bills. Salt Lake City is reportedly putting such a plan in place, involving cards that cost $3 to activate and have the ability to take on $5 to $500 in prepaid fares. C-stores may have an opportunity to sell such cards.
Yet another segment with potential is what Squilla calls the “virtual aisle.” Essentially, it’s the opportunity for consumers to order third-party products online or via Internet-enabled terminals in the store. The stores can then act as a pick-up place for the items or simply as an impulse site to spot-sell a meandering customer.
Debate on Mobile Wallets
The whole “virtual” phenomenon is affecting c-stores not just on the product front, but also on other levels. One of those areas is with emerging mobile wallets.
In what seemed to be a warning to some of the high-profile players in the mobile-wallet space, many stakeholders—including merchants and customers—have been left out of the discussion, according to Jack Williams, president of Paymentcard Services Inc., Fort Worth, Texas. Hence, he says, the business case is flawed. Speaking of his past experience at video retail chain Blockbuster Inc., Williams says, “Merchants care about what drives incremental sales. At Blockbuster, I wanted to know how to get one more video rental out of you.”
New payment methods such as the mobile wallet, as well as new technologies to reduce fraud such as Europay MasterCard Visa (EMV), need buy-in from merchants, who ultimately have to invest in upgrades to the point of sale (POS).
Williams went as far to say that near-frequency communication (NFC) technology, which is the basis of the Isis program, which is backed by major phone carriers, “has no traction.” If any solution is going to succeed, “everyone will have to come to the table—the merchant, the issuer, the acquirer, the processor,” Williams says.
Ubiquity is also an issue for merchants, with a prime example being the tug-of-war between contact and “contactless” payment terminals. Too many uncertainties exist with regards to technology, creating confusion and hesitation among retailers worried about investing in equipment that may never get used.
For consumers, mobile wallets still won’t eliminate the need for some kind of card, especially because ATMs will continue to require plastic, Williams says.
Also addressing consumers, Robert Martin, senior vice president of attended merchant solutions for mobile-services supplier Apriva, Scottsdale, Ariz., says, “The consumer is asking, ‘Why am I going to use it as a payment vehicle instead of debit that already works through a system and my bank?’ ”