Retail and the Uncertainty of the Digital Wallet
New technologies and processes continue to change the retail landscape in mobile transactions. Major financial players have seen the significant potential in these digital payments, which are expected to reach $670 billion and make up 40% of the market by 2015. They are gearing up their strategies by developing new systems, adapting current digital technologies, and forming unlikely alliances. With the evolving integration of mobile in almost every aspect of the shopping experience, these ongoing digital developments will continue to affect how consumers choose to handle their in-store transactions, and compel retailers to decide how they will use them.
The most recent development in mobile payments has been the unlikely alliance of the three major credit card companies — American Express, MasterCard and Visa. Pooling together their resources, they are developing a secure and convenient mobile payment standard that will simplify transactions for both consumers and merchants. If their efforts are successful, they could see a positive response from consumers, as one survey revealed that 62% preferred financial institutions take the lead on new payment methods, trusting them with security concerns more than they trust wireless providers and Internet companies. This is especially relevant to retailers because they understand that, ultimately, it will be the consumers who dictate the form of payment being used for in-store transactions.
Unfortunately, this credit card alliance will be unlikely to make things any easier, as other popular mobile payment channels are continuing to improve upon their own systems. For instance, PayPal recently announced it will be adapting Bluetooth technology to enhance its digital payment experience for both consumers and retailers, with some believing it could overtake the current wireless technology Near Field Communications. Until security concerns are overcome and mobile transactions become easier than swiping a credit card, however, retailers will continue to rely on their customers to tell them their preferential mode of payment.
Although retailers may have uncertainty in how they will integrate future mobile payment applications, they can still be certain about the effectiveness of those in-store processes that affect conversions. Through our in-store analytics, ShopperTrak provides accurate data to deliver one-of-a-kind insight, allowing retailers to have a comprehensive measure of their store’s true performance.