Report • 03.06.2013
Mobile Payment - Variety of offers confuses consumers
To many cooks spoil the broth - This is especially the case when it comes to the topic of Mobile Payment
An ever larger number of different suppliers with different solutions are now active on the market. Of course there are customers who like to take the new offers. But the majority is still deterred by the many “island solutions”. Because if the selected service does not work everywhere, customers quickly are annoyed.
Mobile Payment with the smart phone has been said to be the payment method of the future for years now. Retailers see a promising future for contactless mobile payment, according to a recent study by the EHI Retail Institute: About 70 percent of larger retail companies are planning to invest in new payment methods. Thus, those retailers create the conditions for contactless and mobile payment and respond to the increasing popularity of smartphones. According to a study by the high-tech association BITKOM, in 2012, every third German had a smartphone.
Many retailers want to take advantage of this and bring their own solution to the market. Just recently, EDEKA and Netto have launched their own apps that allow customers to pay at the supermarket - but only in their own stores. But does the customer really want to serach for a different app at every store in his phone's menu? On the contrary: Consumers want a comprehensive solution with which they can pay for their purchases at any store. Additionally, one of the key arguments for mobile payment s that it makes the payment process faster. But that is not the case if the customer must look for the right app in his phone, which is perceived as cumbersome as digging around for the right amount of cash. And there is no more speed advantage in the process. Because when every retailer develops its own app or mobile payment method, the customer still has to mangage a large number of accounts.
No clear leader in technology and providers
Even today it is still unclear which approach and solution will prevail. However, one can distinguish two approaches to the question "How do I let my customers pay mobile?". Edeka and Netto, for example, use their own, native apps, with which the customer can pay. He thus also gets individual benefits, such as exclusive discount offers.
The second approach are the solutions of independent service providers who form partnerships with various retailers, so that the customer can use the appropriate app within the stores of as many partners as possible. The providers of these packaged offerings for example include payleven, SumUP or the eBay subsidiary PayPal. Here the customer can also benefit from special discounts and offers - in a far greater number of stores and easier than with an solution that only suits one retailers stores.
The same is true for mobile couponing. Again, there are vendor-bound and partner approaches. Apps like NuBON for example are collecting all the coupons and receipts of a customer in the phone. However, these apps usually have no built-in payment function and are used purely for storage and redemption of vouchers. So , the shopping experience of consumers is simplified on the one hand and on the other hand still kept complicated.
A combination of payment and couponing in one app - like the EDEKA app, but that can only be used in the company's own markets - seems but the logical solution. This makes paying as easy as possible for the customer. The advantages of the integration of payment in apps also include the uncomplicated handling of customer data (examples are myTaxi and of course iTunes) where the credit card data that isused which is already deposited with the provider.
Retailers themselves are still uncertain
That the number of mobile payment systems rather confuses customers becomes clearer and clearer. A recent study by the consulting firm Steria Mummert also comes to the conclusion that a more thorough standardization is inevitable to make the topic of mobile payments really fit for the mass-market.
The retailers interviewed for the study are very open to new solutions - 45 percent believe that mobile payment has positive effects for customers and the retail trade as well. However, virtually no one actually has a really clear idea of what solution will prevail in practical use and with which strategy they could make use of it's advantages. Therefore, retailers are developing their own stand-alone solutions more out of necessity.
Without standardization, there will be no success
Today almost every customer has a smartphone, and always has it on him. Because of this, the potential importance of mobile payments should not be underestimated. Consumers are already well informed: Individual mobile payment methods are widely known and the willingness to use them is really high. What stands in the way of the breakthrough of mobile payment is mostly the fragmentation of the market. The most important challenge for service providers is to establish a standard of technology and to communicate with each other to achieve a certain agreement. The number of providers - from network operators through device manufacturers to banks and payment service providers – is even more confusing to the consumers.
Cooperation for the success
Many surveys show that consumers put great trust in the banks in particular. The payment method they prefer, however, is a prepaid solution or an using already established payment provider. A common payment product that will be shared among a variety of providers would therefore improve consumer confidence in mobile payment and increase acceptance. Jwith a solution like this, mobile payment would be able to realize its full potential and fundamentally change the way in which purchases are made. With advantages of which dealers and customers alike can benefit.
Daniel Stöter, iXtenso.com
channels: mobile payment, mobile shopping, mobile couponing
