When talking about mobile payments it’s easy to assume that transactions in physical retail is synonymous with the traditional POS-terminal. While traditional magnetic stripe and EMV-based card payments is both secure and user-friendly, there are several emerging technologies with NFC, QR codes, Bluetooth and beacon technology all competing to become the new standard for payments. In addition, omnichannel is more than a buzzword for retailers with online retailers are setting up physical stores, initiatives like Amazon Dash and incumbents enabling new delivery methods with “click and collect”-enabled mobile shopping. For mobile payments, there is a race to reduce friction in the payment process through a simple buy button or one touch checkout.
Both Facebook and Google have announced that they will launch different versions of the buy button integrating purchased with Facebook pages and enabling purchased directly from ads in search results., using the payment information linked with the Google account. When eCommerce, mCommerce and traditional retail are converging, the buy button may become the standard in the physical world also. There are several developments that support this scenario.
The adoption of beacon technology, the buy button could make the jump from online to physical retail through proximity based mobile solutions. Apple announced built-in support for Bluetooth Low energy as an alternative to NFC though iBeacon back in 2013. Paypal has also its own beacon solution, promising to provide “hands free” payments where consumers do not need to pull out their phone. While beacons has not reached mainstream adoption so far, initiatives like Google’s open source beacon format, Eddystone and proximity network provider, Unacast are making the business case for beacon technology more obvious for retailers.
Closed loop solutions like Starbucks’ payment app enables customers to both order and pay through the app before collecting their order. This option has proven a to be a great success, with one in five purchases in the US processed through the app. Subway is also looking for ways to improve the order-to-payment value chain and is partnering with Mastercard for mobile payments.
In addition, merchant-owned network MCX recently announced that the QR-code based payment solution, CurrentC will launch the next month. And there are also numerous candidates attempting to improve the point of sale through mobile POS solutions.
With so many initiatives attempting to improve this crucial part of the shopping experience, the times they are a changing. The remaining question is whether there will be one common standard for retail payments, or if there will be room for many alternative technologies.