The drivers and challenges to mobile payments adoption: Q&A with Tony Rose
As generations of mobile technology have come and gone, so too has the pace of development around mobile payments.
With Apple Pay and Google’s Android Pay leading the vanguard, pushing the pace of innovation in creating novel mobile wallet solutions to complement the in-store and at-home buying experience, we captured the pulse of the marketplace with our director of mobile product management, Tony Rose. With two decades’ experience as a software engineer and architect in eCommerce, Tony has a lengthy background bringing emerging technologies to market, so we caught up with him for this discussion around the state (and the future) of mobile payments.
Q: Where do you see the state of mobile payments adoption to date?
The adoption of mobile payments has been lower than many have anticipated and there are many reasons for that, including EMV, consumer confusion and limited use-cases available. In 2017, I anticipate that the use of mobile web payments and digital wallets will increase and help speed adoption. Once consumers experience the ease of the mobile-web experience, they’ll be more likely to use it in-store. In addition, increased in-store signage and awareness from staff will help reduce the friction and barriers to adoption.
Q: Speaking of which, what have you seen as the main barriers to adoption?
Up until now, it has been the early adopters who have driven mobile payments – the people who go out and buy the new iPhone on the first day and the people who are picking up new gadgets constantly. Adoption has also been driven by customers of large retailers, such as a Wayfair or Buy.com, who have built their own mobile apps. On the other hand, EMV adoption has been slow. I still swipe more than I chip when I use my card, so the theory that everyone being forced to use EMV would drive in-store tap-and-pay methods really hasn’t played out.
Q: So what’s the ultimate game-changer in pushing mobile payment adoption forward?
This month, seeing more mobile web payments, such as Apple Pay, is going to be a significant driver. Some of the retailers I speak with tell us that more than half of all their transactions come from a mobile shopping channel rather than a desktop. So when you consider that data and the other barriers to buying on mobile – from creating accounts to logging-in and providing additional data manually – this is exactly the type of friction that is instantly removed with Apple Pay on the web, and pretty soon Android Pay mobile-web. We’re seeing significant interest from our larger eCommerce retailers to adopt this as quickly as possible.
Q: Do you think ease-of-use is the ultimate driver in adoption?
Everyone can now see the opportunity to a much easier shopping experience on mobile. It will hit that critical inflection point where it really starts to climb because then there becomes a critical mass of people using it and it becomes normalized. I think we’ll see that inflection point sometime midyear in 2017. But you also can’t forget about security and privacy. I think there are still a lot of misconceptions around security. Mobile payments are not only easier, they can also be more secure. That’s a critical point.
Q: To that same thought, what is the incentive for merchants to adopt mobile payment solutions?
It breaks the shopping cart model. With a one-click purchase, why do I need to fill a basket and then go to a check-out form process? Now, typically customers use single product pages where they browse and then buy. You can drive customers to prefer different kinds of shopping experiences while moving away from the desktop shopping cart model. In retail, I see that merchants need to adopt this right away, otherwise competitors are going to get an edge. Sometimes purchases are driven by convenience; it’s not always price-driven.
Q: What do you see as the future of mobile payments innovation?
There’s the Google hands-free experience – it’s something that they’ve been piloting with SMBs. The way that Google’s been working with their hands-free technology is by working with the cards on file –it’s by far the coolest in-store solution that I’ve experienced. I did a video a couple of weeks ago showing how I was able to cash out at a store without doing anything related to a traditional payment. That’s probably the closest thing I’ve seen to the magical experience that everybody’s looking for. How that gets rolled into Android Pay, or what Apple does to counter and where it goes from here – I don’t know. But it presents all kinds of exciting possibilities and it’s not all that far away.
To learn more about Vantiv, mobile payments and Apple Pay on the web, contact Vantiv.