Mobile payments have come a long way … but where, exactly, are they going?
That was a big topic of discussion at the Spring 2013 Mobile Payments Conference, which was held April 10 and 11 at the Helen Mills Event Space & Theater in New York City. The biannual event brought together more than 150 executives to talk about the latest developments in the mobile-payment industry.
Here are five trends to watch, according to the experts who spoke at the conference.
1. “Geo-fencing” is on the rise. The term refers to erecting a virtual fence around a geographic area and targeting customers electronically within that area. Locaid and Alliance Data Retail Services detailed their successful pilot geo-fencing retail promotion during the 2012 holiday season. Customers who opted in to the program received a text message when they were at or near Easton Town Center, a mall in Columbus, Ohio. If they used a particular credit card to make a purchase, they were entered to win a $5,000 shopping spree. Participating cardholders spent an average of 24 percent more in a shopping trip triggered by a text message than the average cardholder.
2. Consumers aren’t yet confident with mobile payments. Joe Cincotta, who founded Pixolut in Australia, observed that consumers have yet to widely embrace mobile payments, even though 79 percent are using smartphones while shopping in stores. Cincotta thinks that these consumers still haven’t been sold on the benefits of mobile payments and, to solve this problem, providers need to leverage the confidence consumers already have in corporate brands. He predicts steady growth in mobile payments for the next two to four years — and then fast acceleration.
3. Mobile wallets are secure. So said David Schropfer, a founding partner of mobile-payment consultancy Luciano Group. In fact, Schropfer believes that mobile wallets are more secure than many of the payment options currently offered in the marketplace. He points out that, as long as customers know their mobile wallet will be accepted by their favorite retailers, they really don’t care which technology they use.
4. It’s the consumers, stupid. In the past, many mobile-payment systems focused more on features and perks than on consumer needs. But Tim Attinger, an executive for prepaid payment-option provider Blackhawk Network, said that today these systems are shifting their energy toward tying goods and services to customers. Attinger also notes that many of these mobile-payment systems are moving from plastic to virtual prepaid cards.
5. Mobile payments meet loyalty programs. Expect to see more pairings of mobile-payment systems and loyalty programs in the near future. Jim Garrett, CEO of Snapfinger, an online portal for placing restaurant takeout orders, said that consumers don’t distinguish between ordering, payment, and loyalty programs. Any company that can combine all three components, Garrett says, will be able to provide “a fully integrated experience” that’s attractive to consumers.