A ding a time save time, check out mobile payments
It was a scene from a one-act play. “Dad, what’s that ‘ding’,” said the young girl grocery shopping with her dad. The customer in front of them had just finished placing his smartphone on the counter-top terminal with his thumbprint leading the way. It was one of the “Pay”s. “That’s a mobile payment from his phone, honey,” Dad said in reply. And, no sooner had the one-act actor used his phone and thumb to pay, than he was off—bagged groceries in tow.
These one-act pays are still off-Broadway, but they’re ramping up in acceptance among business owners, consumer frequency and curiosity creation among other consumers, for sure, that they might soon have a full-on tour. Truth is more than 2/3 of adults in the U.S. now own smartphones, according to Pew Research Center estimates. And, that’s probably more smartphones being carried than checkbooks on a daily basis. The checkbook—that line-holding-up-customer-using-a-check, checkbook. Writing, approving, and, all versus one ‘ding’.
The “Pay”s are here: Apple Pay, Android Pay, Samsung Pay. Using near field communication (NFC), and in one instance even the mag-stripe technology of the dumbest terminals, to turn phone into wallet with the promises of speed and safety. And, new insights from Boston Retail Partners suggest more businesses have plans to up their own mobile payment acceptance game.
Moving money through mobile payments
ShopTalk research, conducted by payments technology company Vantiv and researcher Socratic Technologies, finds that 75% of consumers who said they use mobile payments, cited speed of checkout as the primary benefit. Who doesn’t want customers like them—their desire for efficiency means efficiency for your business too. The research also found that the two giant consuming audiences—Millennials and Gen Xers—are the heaviest users with 46% and 41% of those groups respectively having used mobile payments. In fact, nearly a quarter, 22%, of Millennials say they use mobile payments via smartphones regularly to make purchases.
“Traditionalists”, those aged 65 and older, are significantly less interested in mobile payments. While 10% of that retiree population has used mobile payments, 2/3 aren’t interested in using mobile payments. And while the acceptance and appeal of mobile wallets is growing, there are some hurdles and obstacles that remain in broad scale mobile payments acceptance.
What’s standing in the way of even more mobile payments
If these mobile payments are as simple as a ding, why aren’t more people using them? Sure there’s a lot of back-end complexity associated with mobile wallets—the technology that allows them to operate and securely, but for the most part that complexity is pretty uncomplicated, or hidden, by the work of all the players in the ecosystem. What’s standing in the bigger way, perhaps, is some “front-end” complexity. That’s another way of saying, a lot of us don’t know what’s-what when it comes to mobile payments—and that goes for consumers and businesses alike.
While three-quarters of the consumers that Vantiv and Socratic surveyed said they’re interested in using mobile payments at more locations, 2/3 also said they can’t always tell which point-of-sale (POS) terminals accept them. In fact, the ShopTalk research finds, despite positive mobile payments experiences, that 60% of consumers using them express frustration with associates who don’t know what they’re about, with terminals that aren’t clear (65%) and with variation in the process by retailer (57%).
Commenting to Mobile Payments Today about its recent survey on mobile wallet acceptance among the top 500 retailers in North America, Boston Retail Partners said, “One of the critical factors for any mobile payment success going forward is education. We have found repeatedly that not only are consumers unsure of how and when mobile payments can be used but, even more telling, associates are unsure.”
More education in the process of both acceptance and use, for both consumers and businesses, is just one hurdle to jump. Another is the issue of security. Vantiv’s intelligence found that 72% of respondents hadn’t used a mobile device to pay at a retail location. Of those, 38% are not interested in using them primarily because they don’t think they’re safe. That’s in sharp contrast with those who have used them, more than 60% of whom think mobile wallets are safer than card payments. And, with the security efforts behind most mobile wallets—from biometrics, to tokenization and multiple forms of authentication, there’s a big gap in understanding to overcome.
Who’s making moves with consumers and merchants?
Reported by NFC World, new research released by Boston Retail Partners (BRP) suggests that Apple Pay has the largest percentage of supporting US merchants with 36% accepting the mobile payment service, up from 16% last year. PayPal, MasterCard PayPass, Android Pay and Visa Checkout round-out the top 5 with Samsung Pay landing at six.
(^Source: NFC World, Boston Retail Partners)
When it comes to mobile wallet acceptance plans over the next 12 months, the top 5 mobile wallet leaders retain their leadership, with only Visa Checkout and Samsung Pay switching places as numbers six and five respectively.
The future of what’s my mobile wallet?
The commercially powerful Millennial and Gen X age groups not only are the mobile wallet trailblazers, they represent a powerhouse of consumer spending over the next decade and beyond. Whatever your thoughts on who’s leading the race or your understanding of mobile wallet acceptance, it could prove a big misstep in meeting customer experience and payment expectations to ignore the direction of mobile payments and wallets.
A first step is talking to your payment provider to both look at your customers, who are they and what do they want, and what your acceptance infrastructure is to optimize your plan for future-proofing on the mobile wallets front.