Are merchants against mobile?
Mobile payments have had a slow start in most of the world, especially if they involve a retailer needing to take on board a new point of sale system to begin accepting them. With the rise of mobiles and tablets as the generally preferred method of shopping online, why haven’t brick and mortar merchants started adopting them more widely? In fact, why has it taken Apple and its Apple Pay service to convince them that maybe mobile payments through NFC are the future?
The truth is, when you look at the statistics, users do want to use NFC to make payments. And, now that mobile carriers don’t hold the keys to these transactions thanks to Host Card Emulation advancements, the amount of apps that a user can now make use of for mobile payments has grown too. Visa and MasterCard contactless cards are now accepted on London transport, and you can pay via mobile wallets for that too. And it’s doing well, with over one million uses of it in a week since launch – and Oyster cards are quite prevelant with London commuters, so it’s proof contactless is a service people will happily use.
Indeed, speaking to Luis Uguina, head of technology and digital banking at BBVA, during our webinar on Rebuilding the Mobile Wallet, the results of the BBVA mobile wallet, BBVA Compass, show some incredibly interesting results around how eager customers are to use a mobile payments solution. “We launched [BBVA Compass] in January this year and so far we have near half a million [unique downloads] with 400,000 active users using it every week,” said Uguina. “We are processing more than 2.5 million transactions per month, especially in Europe where the contactless footprint is much higher than in the United States.
“In somewhere like Spain, our contactless penetration is 67 per cent,” he continued, “with cities like Madrid, Barcelona, Seville, or many others with 90 per cent of market penetration in the country and many countries in the north of Europe with near 100 per cent of the market.”
So, it’s almost a no-brainer that contactless is something that customers really want to be using. So what’s the problem?
Well, it seems that it could be merchants blocking progression, but not for reasons you may expect. It seems that the issue is mostly due to the fractured nature of the mobile payments industry, there needs to be a single vision for the merchant to get behind without having multiple POS devices.
“The whole ecosystem needs to work in the same direction to ensure we have one single experience, its not just in the point of sale, but from the merchants perspective,” explained Luis. “The customer can use fingerprint or input a pin, whatever. But a merchant needs to understand the meaning of a new payment system and they need to be sure they are going to have the money in their account at the end of the day.”
It’s at this point Dave Birch, Director at Consult Hyperion, gave his thoughts on merchant contribution and issues with mobile payments; “It’s also true that some of the merchants haven’t thought how these things are going to work. I saw some messages coming back from the States yesterday saying that it was ridiculous that at some merchants you’d tap and pay with your phone – which is terrific – but you’d still have to wait and sign some pad somewhere, and then press some buttons to say it was going to be credit or debit, or you were or weren’t going to donate a dollar to charity. The merchants do have to make some effort if they’re going to make a great customer experience, because it means they have to make reorganise the experience at point of sale.
“This is why I suspect that for any merchants it’s going to be a more attractive strategy to push people into [their] app and away from point of sale, so they don’t have to spend money on upgrading the point of sale systems or installing them” he continued.
Indeed, after Dave explained how the shopping situation worked in Waitrose with self-scanners – and how easy it could be converted into a mobile payments system – it shows that there’s an incredibly easy way to deliver a great customer experience without needing to invest in new POS terminals and absurd infrastructure too. There’s an easy enough solution to it all.
“The merchant, the typical retailer cares about selling more stuff, and the thing that helps them sell more stuff is loyalty, and couponing, and customer recognition – these kind of things,” explained Dave. “They all work very well in a wallet, the idea of a wallet as a central, coordinating medium for all of these things is quite strong. And that again points to the wallet as a common infrastructure rather than as an app in its own right.”
It’s a difficult question to answer, who is responsible? It’s clear it’s not the consumer, that’s for sure.
Click below to listen to the full interview with Luis and Dave about mobile wallets, payments and what the future could hold for the payments industry.