Widespread mobile payments getting closer

Articles
December 13, 2011

Widespread mobile payments getting closer

Smartphones and RFID will be key to speedier, more accurate and well-informed checkout payment processes.

The future of retail checkouts will soon be in the hands of consumers, as smartphones engage even more fully in the world of wireless payments. Supermarkets and other food-sellers should prepare for two developments:

    •    Wave-and-pay systems made possible by Near Field Communications (NFC).  Apple patents already describe how shoppers would “sign” with their iPhone instead of a PIN when paying, reports Fast Company.
    •    The widespread use of RFID (radio frequency identification) technology, expected by many to be economically conceivable for tracking packages once the cost of RFID chips drops below half a penny apiece.

Cashiers aren’t obsolete yet. But the alignment of three trends could make fully automated checkouts for smartphone-equipped shoppers entirely feasible before long, believes F3:

    •    Affordable RFID chips.
    •    The trade’s imminent implementation of the GS1 barcode.
    •    The removal of self-checkouts from many chains in response to customer complaints.

In a likely scenario, customers will pre-load their shopping list into their smartphones, they’ll scan barcodes with smartphone readers as they place items in their baskets, and the smartphones will keep a running tally. Coupons available for purchased items will automatically populate the field as shoppers navigate the store. Finally, as shoppers pass through a checkout area, RFID readers sense chips on the packages and create a final tab. On the way to the car, the smartphone transmits a command to pre-heat the oven at home.

Even more convenient, smartphone databases will help keep people with dietary concerns and health conditions from buying products with certain ingredients they may want to avoid. Smartphones will also warn of potential food-drug interactions. Shoppers won’t have to read packages anymore; they’ll be able to trust the technology.

That Macy’s and Bloomingdale’s are accelerating adoption of RFID technology to track inventory with 97% accuracy signals change will come soon to supermarkets. The department-store chains’ use of RFID to track replenishment goods on-hand by size, color and style should be completed by fall of 2013 in all stores.  

If supermarkets and other food-sellers also see technology as a way to better serve shoppers, they have much work to do:  50% of retailers with revenue greater than $1 billion say that mobile technology is moving too fast to keep up, but 45% also report their competitors have a mobile strategy and they need to respond, reveals RSR Research in its study, Keeping Up With the Mobile Consumer.

They’re watching many aspects of mobile commerce, including mobile payments.

In a survey of 2,400 mobile visitors to m.myxer.com, 53% said they had made a purchase from their mobile phone. Most of this group (31% of the 53%) said they preferred to charge purchases to their mobile phone bill, while fewer (18% of the 53%) preferred to pay by credit card. Younger mobile consumers preferred to charge to their phone bill (by a 38% to 14% margin among those within the 18-24 age range). In the 35-54 age range, credit cards were favored by a 28% to 23% margin, said Myxer