Do I swipe, dip, scan, PIN, or tap?
After several years of being on the verge of eruption, mobile commerce is finally hitting mainstream, but not necessarily for the reasons that you might think.
The technology behind mCommerce (i.e. NFC, tokenization, etc.) has existed for many years, but adoption has been slow. There have been set backs, data breeches, and lack of interest from the consumer.
Lack of Consumer Interest: From the consumer perspective, making a mobile payment can be more complicated and cumbersome than simply swiping a credit/debit card. What’s in it for me?
That was the speak until October of 2015. Then everything began to change.
Here is a little background:
I started my career in telecom, and in early 2005, I was offered a promotion to join a new division of BellSouth (now AT&T) called "Cingular." Since then, I've stayed involved in the mobile industry as a board member of the Wireless Technology Forum. In 2015, I served as co-President, and this year (2016), I serve as President. Wireless Technology Forum is a non-profit group of professionals working in the mobile or wireless industry.
Since January 2012, Wireless Technology Forum has hosted an annual panel discussion on mCommerce with industry leaders including NCR, First Data, Fiserv, Experian, GSMA, and InComm.
In January 2012, Phil Hendrix, PhD, stated that mobile Commerce was "on the verge of erupting"
12 months later, January 2013, Ginger Schmeltzer, Fiserv SVP, declares, "2013 is the year mobile payments will take off." Although Apple has just announce iPhone 5 will not have an NFC chip, the panel predicts 1) Apple will eventually launch a mobile payment option, and 2) Apple’s mPayment product will be simple and add value for the consumer.
Another year goes by, January 2014, the panel discussion focuses around the Target breach; how/why that event will push forward enhanced security for mobile payments. Cherian Abraham (Mobile Commerce and Payments Lead, Experian Global Consulting) explains that the Target breach was worst for debit cardholders who had their bank accounts cleaned out.
3 years from our first mobile commerce "eruption" prediction, January 2015, the panel discussion is titled, "2015: Is this the breakthrough year of mCommerce?" The panel essentially points to exactly 1 shining example of mobile payments, Starbucks, but caveats the Starbucks app because it is QR code based, and not NFC based. John Schweikert, NCR, warns us of the October 1st liability shift with EMV. This precise warning prompts me to conduct my own research about EMV and post my findings on this blog: "EMV: Are you ready?" and "EMV: Chip Timing"
Back to present day:
January 21, 2016, Ginger Schmeltzer returns to moderate the mobile commerce panel discussion with Chris Poelma, NCR Silver President, David Abouchar, Senior Director Product Management, ControlScan, and Sanjay Subramanian, VP of Technology & Architecture, Financial Services, InComm as panelists.
Ginger makes the salient point that mobile payment isn't just about completing the same transaction that you could have completed with your wallet; it's about adding value to the customer. Now this is something that might just bring the customer back into the picture. She went on to point to Uber as the new shining example of mobile payments, revolutionizing the taxi industry.
While Uber is not a mCommerce platform per se, it is a platform that wraps the payment process into services and functionality that give the customer what they want. An easy way to get a ride, know when the ride will arrive, what the car looks like, and an easy way to pay. It points out how much functionality can be built around and include a payment process by using mobility.
But wait, there’s more:
The other side of this coin is what mobility could mean to retail. David reminded us of the new EMV transition imposed on retailers Oct 1st, just before the holiday season. Not only were consumers completely confused if they should swipe, dip, scan, PIN, or tap to complete their retail transaction, retailers found that the upgrade was hugely expensive and added time to the check-out process. Not to mention the advances in security, like NFC, that mobile brings to the table. So, Retail started taking a much harder look at mCommerce and many are planning mPOS and other mobile payment solutions this year as part of their payment strategy.
If it’s a win for the consumer and a win for retail, that is a recipe for an ‘eruption’.
After 4 years of predictions, it finally took the EMV requirement and its cost, confusion and time impact on the customer to move mCommerce along. And to open the door for even more break thru platforms like Uber.
Thanks for following along on my mCommerce journey at the Wireless Technology Forum.