3 tips for accepting mobile payments

Internet Retailing

3rd Oct 2016

The advent of mobile payments brings enormous potential and widespread disruption in the retail and commerce sector. Amid the many benefits, most significantly mobile payment systems enable an easier, more personalised shopping experience for customers and simpler payment infrastructure systems for retailers.

However, while digital wallets including Apple Pay and Android Pay have now launched in Australia, most Australians still remain sceptical about mobile payments. According to recent research from global banking research firm RFi Consulting, while 59 per cent of Australians have made purchases with a contactless ‘tap and go’ debit or credit card, only 24 per cent of Australians indicated their interest in trying mobile phone payments. Furthermore, just 10 per cent of Australians have actually made a purchase using a mobile wallet, compared with the third of respondents in India and China who use the technology to make purchases.

A number of roadblocks have slowed this development of mobile payments. For instance, financial services companies and technology providers have struggled to collaborate and define a common roadmap. Take Android Pay for example – while the innovative service has been fully operational in Australia since earlier this year, ANZ is the only one of the big four banks compatible with its service. Hardware is also an issue. Currently, not all phones have the functionality to support mobile payments and near field communications (NFC) technology is still treated as an afterthought by many retailers.

Though Australians have been slow on the uptake of this technology, adoption in North America and China is providing early proof that contactless mobile payments have the ability to gain widespread popularity. Australia is leading the world in acceptance of contactless card payments and it is almost inevitable that this acceptance will broaden into contactless mobile payment as the issues described above shake out across the ecosystem of enterprises and small businesses that need to work together. Eventually consumer expectations for simplicity, efficiency and reliable security will win out.

While the jury is still out on exactly what mobile payment methods will gain majority adoption in Australia, leading retailers should look ahead and adjust their strategies for the growth of mobile payments. Retailers that do not accept transactions using the technology will be at risk of falling behind competitors. In order to prepare for this anticipated uptake of mobile payments, retailers need to consider the following key points.

1. Pay attention to demographics and its tech – For example, retailers catering to higher-income earning or tech savvy customers should expect to see quicker take-up of mobile payment solutions using technologies like NFC than companies that cater to value-based customers.
2. Don’t forget about the app play: Retailers should look for ways to integrate mobile wallet capability from the likes of Apple, Samsung and Google into their mobile apps. For instance, in Australia, BP has released BPMe, which allows BP Plus card holders to pay for their fuel from the comfort of their car using their smartphone, creating a user-friendly experience for their users.
3. Leverage loyalty and other elements beyond payment in the process – Banks and stores alike are trying to drive mobile payment traffic with incentives. Wells Fargo offered $20 credits for using their cards in Apple Pay, while the Wallet app will support storing loyalty cards and offers.

While the mobile payment industry is still in its infancy, change is coming fast. Technology and business are expected to mature with ongoing innovation and increasing consumer adoption. Looking into the not too distant future, we will see the emergence of ‘autonomous commerce’ or ‘smart payments’. Soon, devices will be able to make purchases without the intervention of a human beings entering PINs or passwords and in years to come, we can expect devices to start to learn our needs, wishes and intentions. An exciting future for digital devices lies ahead.

Abe Saheley is Accenture’s Managing Director for Digital Mobility in Australia and New Zealand.