What's wrong with mobile payments ?
Mobile payment. The next gold rush. Apple, Facebook, Google, have joined Paypal to be part of the next big thing. The valuations of every mobile payment-related company have surged several times faster than the NASDAQ composite.
However, when I look around me, in stores, in restaurants, in the street, mobile payment is nowhere. I live most of the time in New York. During the last 9 months, I only saw one 40-something executive paying his meal with Apple Pay (I was expecting a millenial but he was more like Gen X). The next day, the same guy used his debit card. I know company valuations are an anticipation of future revenues. Right. But in the case of mobile payments, I do not see the advantage of using your phone, instead of swiping or using contactless plastic cards. I do not get it. 99% of consumers do not get it.
Payment is not a problem. Get in a cab in NYC. Cabs already offer 4 ways to pay for your ride: Contactless plastic cards, swipe, textos and of course cash. Adding a fifth one will not improve significantly the payment process.
Let's see what is happening online. Facebook and other social networks are right now deploying "Buy" buttons to enable impulse purchase. These will maybe reduce the famous cart abandonment issue linked to any form of online shopping, by skipping the tedious part of you entering personal details into tiny fields. However, as you will still have to select a size, a color or a delivery method, the gain will not be so spectacular.
Digital sales have grown so fast in the last years that almost no market expert is there to remind everyone that 92% of all purchases are still happening in the physical world. The dominance of physical vs. digital retail will continue for a long time, as shoppers are making 76% of their purchase decisions in stores. Amazon is a great company, but it is still much smaller than Walmart or Costco. "Buy" buttons may be a good solution for online shopping, but do not solve anything in the physical world, where 9 out of 10 purchases are still made.
The real need is to be able to purchase items whenever you need them. Products and services are not always available. The store may be closed or too far away. The waiting line is too long. The product is out of stock in that particular outlet.
Smartphones, in those cases, can really help. By freeing the shoppers from space and time constraints. Store is closed ? No problem. Just take a picture of the product you want in the window and order it in 20 seconds. Waiting line is too long ? Scan menu items, pay in one click and skip the entire waiting line in front of the till. Product is out of stock? Order it in the store and be delivered same day. That is the real service customers expect. Instant, 24/7 product availability.
Take the global retail industry. Out of stocks and imperfect product availability are estimated to cost 100 b$ in lost sales every year. Mobile solutions can help there. Reduce Queuing. Enable shoppers to get everything they want, even if the product is not in store during their shopping trip. "Hardcore" mobile payment does not solve product availability. It does not solve waiting lines. It just allows shoppers to (maybe) gain a few seconds when paying. Not really exciting.
The world does not need more payment enablers (I exclude peer to peer payment in emerging countries). Shoppers need purchase enabling technologies, as time and space have become big constraints in urban areas where 80% of the world population is now living. There is nothing wrong with mobile payment as a technology. However, if it does not address the real consumer need, contactless may well become senseless.
Georges Le Nigen is Chief Revenue Officer for Powa, a global technology company. During his 20 year career, mostly with successful US and UK startups, Georges has sold services and software to hundreds of large accounts in Europe and America.
Agree that Mobile Payments have to be simple and convenient to use. However, I see mobile payment services that use terminals as "nice to haves" and not "need to have". In Denmark, we have the payment terminal MobilePay by Danske Bank, which has been hugely successful. MobilePay started as a simple P2P application. They did though quickly move into the low-end of the payment market, by targeting shops that prior did not accept payment cards. MobilePay only require the shop owner to have a smartphone and download the MobilePay Business App and then consumers can pay by entering the shops phone number. Consequently, MobilePay created real value for all the merchants and businesses who prior could not afford the costs a traditional terminals requires. I miss this focus in all the major payment terminals, since as I see it, it is here that the mobile payment terminals can create real value!
Head of Internal Audit at Newcastle Greater Mutual Group
9 年Great article. 24/7 service or rather the lack thereof is the issue.
I focus on the human layer of technology
9 年George, you are spot on. As a matter of fact, there are countless 'remote purchase' technologies already in place. It's just that the industry media - and especially in the US - seems to obsess about proximity (NFC) payments. It's like landlines vs. mobile phones: the whole point of _mobile_ payments should be that the customer does not need to be present at the point of sale.
Owner, MAG3 Notary Services (Retired from the IT profession)
9 年As a follow up, I'm pleased to report that the cashier's check I mailed in was received today and posted immediately! All funds immediately payable! ;)