Last week Wal-Mart Chief Financial Officer Charles Holley told an investor conference that, while the mobile payments landscape is constantly shifting, it is clear to his company that its shoppers will gravitate away from cash and cards and towards mobile payments. “I think that’s where the future is going to be going for our customer,” Holley said.
With nearly $500 billion in revenue, the world’s largest retailer has ample resources to make sure the more than 2 million employees it has at its 11,000 plus locations can help fulfill its customers’ mobile payment future. But for smaller retailers, the process of bringing staff – and especially front-line retail staff – up to speed on the key basics of mobile payments may be more challenging.
To help make it a little less challenging, we have compiled what we believe are the 10 essential things today’s retail employees should know about the present, past and future of what will soon likely become the dominant form of customer payment.
1. Mobile payments are already everywhere, not just in developed markets like the US and Western Europe. In fact, some of the countries where people already rely on mobile payments the most are in Africa, where mobile payment technologies “leapfrogged” over the relatively underdeveloped forms of electronic payments available.
2. Mobile payments seem new and exciting, but have actually been around for a while. What are called “proximity” payments – transactions involving a smartphone communicating directly with a point-of-sale (POS) terminal or some other local device – are a somewhat recent development, but other forms of mobile payments such as text-based parking payments have been in widespread use for years.
3. They go way beyond “brick and mortar” stores. In addition to things like paying for parking, the mobile payments universe includes a broad number of “remote” transaction types, most notably in-app purchases. But not everything bought with a phone or mobile device is considered a mobile payment; if it involves a web browser it is usually considered more of a regular Internet or “e-commerce” purchase.
4. The current way of making in-store payments is just a start. Because of Apple Pay and related services, right now attention is focused on a form of in-store payment known as “near-field communication” (NFC) in which the customer passes their phone over a point-of-sale terminal to start a payment. But payments can be initiated in other ways – such as by scanning a QR code – and firms like Cellum are currently working on other, even more convenient ways to let customers make proximity payments.
5. They can be the safest form of payment. Mobile payment systems generally employ multiple layers of security that make them safer from theft or fraud than cards or cash, for both the shopper and the merchant they are using them with. For example, the mobile payment systems developed by Cellum for various banks around the world have been used for years without a single case of fraud.
6. They can be the least expensive form of payment. Because of the potential for superior or even airtight security, mobile payments can lower the overall costs of doing business, allowing them to pass on savings to their customers and employees.
7. They can be the quickest form of payment. Developers for firms like Apple and Cellum are working long hours to trim the time necessary to initiate and complete a mobile payment while guaranteeing its security, and in many instances they are already the speediest way to make a transaction.
8. They can offer incredible flexibility for the consumer. Individuals can easily install numerous mobile payment apps on one device, each with a separate “wallet” holding numerous different “payment instruments,” such as credit or debit cards or bank accounts.
9. They can be merged with loyalty, couponing and rewards programs. One of the most powerful uses of mobile payment systems involves the pairing of payments with loyalty and rewards programs. And because digital wallets can store essentially limitless amounts of data of the sort normally held on plastic or paper cards, customers can more easily take advantage of such promotions with a much larger number of retailers.
10. They can be integrated into other sales and marketing channels. Mobile payment systems are increasingly seen playing an important role in retailers’ “Omni-channel” marketing and sales strategies, in which the customer’s experience is linked across all different shopping “channels,” such as stores, catalogs, and television and radio promotions.