Apple Pay, Android Pay, Samsung Pay: Where’s Your Wallet?
Last week Samsung launched its mobile payments app to compete with ApplePay and Android Pay, with much anticipation among technology bloggers. A few Technorati rushed to try the application so they could compare and contrast with the others. While it’s not likely that the general population will comparison shop for their payment system anytime soon, the technology is definitely gaining traction due to the ease of use in a world of ubiquitous mobile phones. In addition, for some people the added security features of tap-to-pay offers peace of mind in a world addled by data breaches from malfunctioning credit card swiping technologies and chip readers. These emerging mobile payment providers take advantage of near field communication (NFC) technology (contactless communication between devices) to enable the payments.
For the Apples, Samsungs and Googles of the world, this move is not so much a rush to unseat banks and take over the financial world, as it is an opportunity to gain more insight and thus control over the customer experience. Mobile payments offer retailers the opportunity to blend features of the online and offline shopping experience, gaining greater insights about consumer spending habits along the way.
For example: imagine a customer circa 1998 who frequents a coffee shop and eventually takes a loyalty punch card by the register. In a few weeks, he has amassed the required number of purchases and receives a free coffee and repeats the experience. Imagine that same customer today, enabled by a mobile payment app: he uses the app once for a coffee, and is immediately offered the opportunity to purchase twelve-for-the-price of ten coffee drinks to use at any time. This loyalty program is like the loyalty card but in reverse: it happens early in the relationship, faster, and when the customer least expects it. And, the ability to add loyalty perks with mobile payments is almost limitless, unlike the punch card which must be repeated again and again, with no variation and little opportunity to differentiate the shopper who visits twenty times from the one who visits 200 times. Gaining customer trust and buy-in early in a relationship could be a good way to offset decreasing customer loyalty.
Widespread adoption of mobile pay technology may be slow, but is likely. Deloitte predicts that by the end of 2015, five percent (5%) of NFC-equipped phones will be utilized for mobile payments. Will they be right? Time will tell.