Is the In-Store Experience Better With Mobile Payments?

Nov 14, 2016 — Margeaux Girardin
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New payment technologies have made significant strides in improving both the payment solution and overall in-store experience for shoppers. Merchants are now tasked with understanding the benefits and drawbacks of such payment innovations and are wading through the waters to find the perfect payment fit.

Past attempts at innovating payment solutions in-store have shown mixed results as newer initiatives have yet to develop significant uptake. One such example is mobile wallets. In a report by InfoScout analyzing various payment methods used by 300,000 shoppers during 2015’s Black Friday weekend, the usage rates of mobile wallet technologies such as ApplePay and AndroidPay were at their lowest of all time. A mere 2.7% of eligible transactions were completed with ApplePay and about 2% used AndroidPay. Not surprising, the vast majority of payments were made with cold hard plastic.

EMV growing pains 

And that’s not to say that credit and debit payment initiatives haven’t experienced their own share of growing pains. As U.S. merchants began their push into using EMV certified terminals back in October 2015, there was (and to an extent still is) a lack of buy-in from merchants. In addition to the upfront investment for more expensive terminals, there remains much debate over whether or not transactions made through EMV terminals are substantially slower than those made with magstripe terminals.

The migration challenges to EMV have also directly impacted the slow uptake of mobile payments among enterprise merchants.

Although the same cannot be said for larger merchants, mobile POS systems for small merchants are now a common, if not, necessary method of accepting payments. A recent survey by McKinsey showed nearly 7% of small merchants use a mobile POS system, while 33% stated that they were interested in implementing mobile payments in the future. A primary factor to this rapid adoption is one of convenience for both the merchant and customer. That same factor is not true when applied to the context of a larger merchant.

What's a larger retailer to do?

To respond to the pain points that larger merchants experience with mobile payments, including clunky and multi-component terminals, companies are releasing slick new hardware options powered by robust payment systems. One such example comes from Ingenico with their latest- and in our opinion sleekest- mPos solution to date- the iSMP4. This enterprise class mPOS solution is lightweight and agile, featuring increased battery capacity and the ability to accept all forms of payments, from EMV to chip and sign, to magstripe and NFC.

The iSMP4 terminal and other hardware solutions speak to the needs of enterprise merchants, allowing them to accept broader payment methods in a more flexible format.

One gap that technology cannot entirely bridge, however, is that of customer and merchant buy-in.

Merchants must weigh the pros and cons of not only adopting mobile payments, but also re-creating the in-store experience to accommodate new payment solutions. On the flip side, more must be done to educate customers on the benefits of mobile payments and how this will change their in-store experience- an education gap that was perhaps the pitfall for mobile wallets.

And although the verdict is still out on what role, if any, mobile payment technology will play for larger merchants, one thing is for sure, the in-store experience will change with technology in the driver’s seat. Merchants can either be along for the ride or risk being left in the dust.

For more information on iQmetrix Merchant Services and our supported mobile payment terminals and hardware options, follow the link below to visit our merchant services page

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Topics: Retail Operations, Wireless Trends, Payments

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