Mobile payments: What’s it all about?

The retail world is changing. Constant innovations in technology are allowing for new and improved ways to make payments and meanwhile, customers’ expectations are higher than ever. They are exchanging loyalty for whichever brand offers them the most convenience, the most relevant promotions and loyalty schemes, and the best overall shopping experience.

Benefits of Mobile Payments

Mobile payments such as Apple Pay are proving to be a significant part of meeting these evolving needs and desires, and retailers must adapt in order to survive. So what are the key benefits of mobile payments for retailers?

Streamlined Checkout Process

Firstly, it streamlines the checkout process and especially so if you are a store that is using mobile devices such as iPads to take payments. Mobile payments can be significantly quicker, offering customers’ convenience and adding value to their decision to shop with you. A quicker payment also means that you can accommodate more customers in the same time frame. This is particularly useful if you have a ‘rush hour’. More customers = more sales = more profit!

Integrated Loyalty Schemes into Apps

Another benefit of mobile payments is its ability to integrate loyalty schemes into apps. Rather than keeping dozens of rewards cards in their wallets, customer data is stored within the app and every time a customer makes a purchase the relevant rewards are automatically uploaded to that retailer’s loyalty scheme. Again, this improves the customer experience, allowing customers to easily claim or spend any points or rewards that they are entitled to. Loyalty programs are driving retailers to create their own apps, asking customers to upload some of their personal data in order to register. You can also make a record of what they are purchasing and when. This knowledge is incredibly insightful when it comes to knowing what items are selling to which demographics, and is a valuable tool for stock management.
App-based loyalty programs also give your business access to valuable information that you can use to tailor your rewards and promotions to give each customer a personal experience.  If you can create tailored rewards based on what your customers are purchasing you are on to a winner! Globally, many large retailers are already embracing app-based loyalty programs, and it’s starting to make headway in Australia with programs such as Myer One. Additionally, retailers can also sign up to apps, such as Loyalty Zoo, which allow you to create and run your own mobile loyalty program for a small monthly fee.

Save Money on Credit Card Fees

That’s right, as convenient as credit cards are, the cost per transaction that retailers have to pay soon mounts up. However, typically mobile payment companies charge less than merchant services, resulting in direct savings for retailers.

Combining Mobile Payments with Mobile POS

Clearly mobile payments have some serious benefits for both consumers and retailers alike. You can enhance these benefits even further by introducing mobile POS into your stores. More and more retailers are doing this as they recognise the importance of the physical store and how it’s at the heart of the connected retail experience.
By using mobile devices to take the payment, the customer need never leave the product they are looking to purchase. Consumers struggling to decide between two different hand bags can get advice from the sales assistant and process their payment all in one location. This creates convenience and adds value to your brands shopping experience. It also eliminates the need for queuing, which is a serious psychological barrier that occurs between choosing the product and making the payment.
The preference for mobile POS is rapidly growing. And it doesn’t just stop at the high street; even luxury designer brands are jumping on board. One of the key things reported in the media when Victoria Beckham’s flagship store opened in London in 2014, was the use of iPads in place of a traditional till. Not only convenient for both the customers and retailers, but it reflects her brand perfectly, fitting seamlessly into a store that is sleek, sophisticated and resembles a contemporary art exhibition more than a fashion boutique.

Is there a cost?

Combining mobile payment with mobile payment apps provides convenience and customer value, but at what cost? Can accepting payments made on a mobile device really be very secure? As retailers, protecting yourself and your customers from fraud is one of your biggest priorities.
Fortunately, mobile payment security technology has been evolving rapidly. Whilst it may seem that simply tapping your iPhone or iWatch to a terminal and letting ApplePay do it’s  thing is pretty risky, your personal and account information is actually now more secure than ever. For example, iPhones now require a fingerprint ID before they will authenticate any purchase. Your customers credit or debit card numbers are safe too as they aren’t stored directly on the device. Instead when customers set up their mobile payments their card details are tagged to a unique account number that is stored in the ‘secure element’ chip of their device. All the data transmitted when they make a payment goes through multiple layers of encryption to ensure that it is as secure as possible, minimizing the risk to them and you.
With technology developing at an exponential rate and customer expectations evolving alongside them, it can be difficult to predict the future of payment processing. However, we can be certain that in order for retailers to survive, there is a need to adapt to the technologies that improve customer experiences. Great products are only half the battle and it will be retailers’ ability to make customers feel valued and provide them with personalised experience that will win the war.