In a pre-conference session at this year's CTIA Wireless Conference in Orlando, Fla., an expert panel discussed the challenges facing merchants looking at the future of mobile payments.
The session, entitled "Merchants and Commerce Over the Mobile," brought together David Talach, vice president of global product management for VeriFone; Mike Grimes, CEO of ModivMedia; Mike Wehrs, CEO of ScanBuy; and Dodd Roberts, president and CEO of the Merchants Advisory Group, and was moderated by Steve Mott, a consultant with Better Buy Design.
The discussion was lively at times and highlighted the fact that the outlook on merchant adoption of mobile payments in the brick-and-mortar environment is bright, but still faces challenges.
Bullish on NFC
In his remarks, Talach said that contactless payments at the point of sale represents an opportunity for merchants. He said that retailers want to own the shopping experience, and that desire will drive what technologies they select. He also said consumers want "payment plus something," and that if consumers can tap the phone and do something else, such as receive a discount or loyalty rewards, they will adopt a technology.
Talach said he is particularly bullish about near field communication (NFC) technologies because they bring another layer of engagement at the point of sale.
"With NFC, the checkout is coming alive," he said. Talach added that NFC means the point of sale is more than just payments, now that applications like loyalty programs connecting consumers to merchants can be added into the mix.
VeriFone is putting its full weight and power to make NFC happen, and the company is about "building bridges" for merchants to show them how to connect the mobile phone to the brick-and-mortar store, Talach said.
Success not guaranteed
For his part, Mike Grimes emphasized the fact that building a successful mobile payment solution is no easy trick. Grimes told of two devices his company built "that went down in flames." His company had in the past built devices with a host of features that still were not widely adopted by merchants or used by consumers. But the smartphone will likely change that, since consumers are becoming more comfortable with the idea of shopping by using a handheld device, he said.
"People are no longer afraid to use a device to shop," Grimes said.
The benefits of mobile payments will affect merchant adoption as well, he said, noting that mobile shoppers spend more money, and spend less time, in the store — and that "win/win" relationship would help the technology.
Dodd Roberts provided a more sobering assessment of the future of mobile payments. While there seems to be a significant clarity on the part of those promoting mobile payments, he said, confusion from merchants over everything from standards to security is sowing reluctance among many merchants. Neither merchants nor card issuers seem to know exactly what they want to do, he said.
As an example of how the major credit card brands have hurt NFC adoption, Roberts pointed to the costs and problems associated with merchants complying with PCI security standards. Merchants have spent $20 billion on PCI compliance, he said.
"How many times could we have implemented EMV (a secure payment standard) and been more ready to implement NFC for that same amount of money?" he asked.
But Roberts also made several suggestions on how to encourage merchant adoption of mobile payment technologies. The payment community must commit to a higher level of collaboration to move faster toward the goal of mobile payments, he said. Roberts also stressed that, while a transition time from current payment methods may be necessary, there should be a focus on the end result of a workable mobile payments system without creating unnecessary expenses for merchants.