In the last decade, the growth in consumers owning and using smartphone devices has revolutionised how they shop, research from comScore released earlier this year estimated that 64 per cent of UK mobile users now own smartphones – as well as 82 per cent of new phone purchases also being smartphones. Retailers are now looking forward to the next step in mobile, to be used as more than just an extension of e-commerce strategies and also help improve the in-store experience.
Payments are one area that many retailers, banks, and technology providers see as the next step for mobile devices. Whether you believe the research saying the mobile payments industry is booming (growing by 27 per cent this year) or those that say its failing because it’s available in less than one in ten stores on London’s Oxford Street, one thing is clear – smartphones offer a unique opportunity for consumers to make transactions quickly and easily.
Whether a given solution uses NFC, an app, a smartphone camera, or a clip-on card reader to facilitate a cash transaction is interesting to the industry, journalists, and even some members of the public. But it does not signify that any given solution will propel us into a future, in which everybody (or almost everybody) uses a phone to pay for things.
We – solutions providers, the media, retailers themselves – are in danger of being distracted by the arguments of payment technology, instead of remembering why mobile is such a powerful technology in the first place. For example, much discussion remains focused on NFC vs. QR code technology, but most solutions on the market have a common problem – they aren’t taking full advantage of the technology already in a consumer’s hand.
Modern smartphones give retailers an opportunity to engage consumers with more than just a new way to pay for goods, but also loyalty schemes, special offers, and deals. While many of these functions may already be available through separate services or mobile applications, the advantage for brands of offering these together is the creation of a transaction jumping-off point – to become the starting point or continuation of its interaction with a customer, rather than an end point.
Used correctly, this combined offering creates a channel between retailer and consumer – a channel that would stay open after a payment has been made and allow specially curated offers and loyalty rewards to flow from businesses to customers, while it also allowing payments to flow in the opposite direction. Also adding value for the user outside of the retail environment – by catering for all of their banking needs and by bringing all of their loyalty schemes and offers together and making them accessible via a single dashboard they can carry in their pocket.
Critically, such a solution would not just exist to streamline an already-streamlined process in order to allow a technology vendor or creditor to take a bite out of a transaction. It would improve the lives of consumers and help retailers to flourish, making mobile payments the true silver bullet.
By Andrew Smith, Co-Founder and CTO of CloudZync.
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