Mobile payments are effectively not much more that putting a card into a mobile handset. What will drive consumer adoption of mobile payments eventually?
Usability is a key issue. Generally speaking, customers are not interested in the technology that lies behind a payment product. They want a solution that they can use quickly and intuitively. And in this sense NFC is a good solution, because if you want to use it, you do not even have to unlock your mobile phone to pay.
Once customers try it out for themselves, they will soon realize the benefits of mobile payment. This is simply because they are obvious. A contactless, mobile transaction is for example much faster, much more convenient and you no longer have to wait in long queues at the checkout. In addition, a mobile wallet provides the advantage of being able to constantly monitor the conducted transactions. And they have access to their general transaction overview at all times and receive a message in real-time for each cash movement.
What are the differences in transmission standard (NFC, QR Code, Beacon / BLE) and where should merchants invest in?
The widest acceptance have payments by Near Field Communication (NFC), which will be further augmented by the introduction of Apple Pay. NFC technology means the wireless and contactless transmission of data over a short distance. Essentially, it can be said that the infrastructure for contactless NFC payments already exists today with a large number of NFC POS terminals and is making further inroads into the market. NFC is the stipulated open standard, allowing users to make contactless payments in all the countries on this planet. The outstanding feature of NFC-based approaches is that they broaden the already existing and established acceptance of VISA, MasterCard and Maestro to include the contactless payment option. It is easiest for high street retailers to offer customers contactless payment via NFC compliant smart phones or with an NFC sticker.
For this, they only need an NFC-compatible cash terminal. New devices are already fitted with this technology as standard.
QR Codes are mostly closed systems, i.e. retailers have to be acquired by providers for the process and the point-of-sale environment adjusted accordingly. We will definitely see QR codes in certain application scenarios for a long time yet, but in my view this technology is less suited to payment processes because it requires too many steps.
I regard Bluetooth Low Energy as a useful addition to NFC. The push technology combined with beacons in the shopping environment lays the groundwork for customer retention opportunities. BLE radio technology facilitates contactless data transfer at a distance of up to 10 meters. Using micro transmitters, the so-called beacons, BLE provides location-based services that are communicated to the point-of-sale. As soon as a customer comes within the range of the beacons, retailers can take advantage of an additional communication channel and send personalized offers to the customer’s mobile device. In this way, BLE is interesting in marketing-led approaches that include payment, but focus on new customer retention possibilities through voucher and loyalty point programmes. Ultimately, BLE links the online and the offline world, which is becoming increasingly important.
No matter how payment is made and what transmission standard is used, all technologies have a common goal of enabling customers to make mobile payments by mobile phone and making it an everyday reality. As payment experts, we are technology agnostic and drive the market forward with solutions that offer our customers the most added value.
We hear a lot about BLE and iBeacon technology enhancing the shopping experience. Could you give some examples of use cases?
Near field technology such as BLE provides retailers with location based and personal information about their customers. They also enable consumers to be connected on their mobile at the PoS. There are different application possibilities, how to use BLE. The main thing is the personalized approach: Customers check into a shop on their smartphone when entering. Then they can receive a personal message and check-in vouchers as a purchase incentive or information on the latest offers. Furthermore, merchants can use BLE for in-store navigation, which will guide customers wirelessly to their desired products or special offers in a targeted way. And of course, the direct connection with loyalty programmes connected with a payment app is another important point.
Are there any trends that you find most exciting in the omni-channel space right now that merchants should really be watching?
I think omni-channel commerce is the overall trend. Consumers expect a consistent brand experience. The service and advantage of each channel must merge in such a way that consumers can easily change the channel when they want to. The navigation in the online store must also be supported offline; recommendation marketing must work in all channels as well as payment and delivery. Search online – buy offline, search offline – buy online, delivery through store or at home, return in store or per mail etc. All these services must be experienced without channel boundaries, combining the advantages of the channels into one, consistent brand experience.
About the authorChristian has almost a decade of experience in the online payment industry. In his current role he supports companies like Deutsche Telekom, Orange, Télefonica and Vodafone.
Company descriptionWirecard AG is one of the world’s leading independent providers of outsourcing and white label solutions for electronic payment transactions. The Wirecard Group has been supporting companies in accepting electronic payments from all sales channels. A global multi-channel platform bundles international payment acceptances and methods, supplemented by fraud prevention solutions. When it comes to issuing their own payment instruments in the form of cards or mobile payment solutions, Wirecard provides companies with an end-to-end infrastructure, including the requisite licenses for card and account products. Wirecard AG is listed on the Frankfurt Securities Exchange (TecDAX, ISIN DE0007472060, WDI).
The interview with Wirecard can also be found and enjoyed in our 2014 edition of the Online Payments Market Guide, which can be downloaded here.
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