Mobile commerce has long been viewed as a transformative force in the payments industry, promising to change how consumers shop and pay for goods and services. Yet despite advances in smartphones, digital wallets, and contactless payment technologies, widespread merchant adoption has often depended on one critical question: does the technology generate additional sales? While innovations such as near-field communication (NFC) can make transactions more convenient, merchants ultimately evaluate new payment methods based on their ability to increase revenue, reduce costs, or improve customer engagement. As mobile commerce continues to evolve, its long-term success will likely depend less on the underlying technology and more on its ability to deliver measurable business value for retailers.
I believe there are three mobile-application genres in use today. Mobile Banking, accessing your banking information; mobile remittance, moving money around the world; and mobile commerce, the buying of goods and services at a merchant’s point-of-sale physical location. I would like to take a moment to discuss mobile commerce.
The recent reveal that Apple’s iPhone 5 does not incorporate a NFC capability to support commerce actually should not have been a surprise. While many have been announcing a mobile trial here and there, the reality is that technology by itself does not drive revenue. The holy grail for merchants is driving incremental sales, not replacement sales. Most merchants know that on any given day, they will have a base line of what to expect. This varies by day of the week (Saturday is better than Tuesday for example), yet the reality is just by opening their door, they will drive a known level of revenue. A merchant can only ask their current customer base to buy so much. At Blockbuster for example, if we ran a promotion that said “rent 1 get 50 free” and had one day to watch them, there would be no pulsing of sales. A good customer can only buy so much gas per month, no one will drive more miles just to buy more gas with a new technology.
Now there are rumors of the iPhone 6 coming in the spring with an NFC chip. I think one of the elements we miss is that a smartphone with a NFC chip is just another form factor to hold an account access methodology. After a speech one day on mobile commerce, a guy held up his phone and asked me “where you put the money”? I told him right behind the battery.
The key to success of mobile commerce is how can it pulse incremental sales for merchants. Replacing a magnetic stripe with a smartphone alone will not do it. You might remember Beans, Mondex and others that were going to replace payments as we knew them? NFC readers at ALL merchant locations accepting MasterCard or Visa is many years away. Many merchants, especially medium and small ones are today thinking of how to comply with chip-and-PIN and encryption mandates. If a new technology does not lower a merchants cost of acceptance, or drive incremental revenue, the question will continue to be asked by merchants, “Where’s the Beef”?
Mr. Williams brings over 24 years of experience in credit and debit cards arena. As president of President of Paymentcard Services, Inc. he has designed and implemented fully operational credit, debit and prepaid card and mobile commerce programs for clients throughout the world. Clients include Federal law enforcement agencies as well as other law enforcement agencies within the State governments. Paymentcard Services is a prime contractor to DHS for a terminal based prepaid access device interrogation at point of arrest. He is a member for Texas’ Counterterrorism and Critical Infrastructure Committees dealing with post event infrastructure recovery. In addition to his work designing and implementing payments efforts, Jack as key to the development of the International Red Cross’ mobile disbursements effort in Haiti, post earthquake.
