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Today's in-store payment experience for U.S. consumers is similar to Forrest Gump and his box of chocolates: You never know what you're going to get.
We're four months past the EMV liability shift and consumers are unsure whether to dip or swipe their payment cards when they approach the checkout counter. EMV acceptance varies with the retailer's size (big-box leads the way), but it's clear that the transaction process itself is slower than a card swipe.
So, as the EMV transition continues in the U.S., can these slower checkout experiences help pave the way for contactless-only registers where consumers can tap and pay with either a card or mobile wallet and not worry about a dip or swipe?
Mobile Payments Today posed the question to some payment technology providers at the recent National Retail Federation Big Show in New York City. They all agreed that such an idea is viable. In fact, at least one service provider is advising merchants to walk this path at the checkout line.
For the last few years, two things have stymied NFC-enabled mobile payments in the U.S.: the lack of the properly equipped smartphones and the scarcity of contactless acceptance points. Today, neither is the obstacle that it once was. NFC is now a standard feature in most high-end smartphones and the majority of EMV-enabled point-of-sale terminals contain the necessary technology to accept contactless payments.
This combination appears to be the right environment for some merchants in certain retail sectors to at least test the idea of contactless-only checkout registers.
"As a partner [with merchants], you're talking to them and they're asking you, here's my EMV pain, what are you going to do to solve it?," Marc Castrechini, vice president of product management at Boston-based payments technology provider Cayan, told Mobile Payments Today at the Big Show.
The answer could be mobile payments.
Up until this point, Castrechini said some merchants have handled the EMV pain in a "backwards manner." Some discussed the idea of having checkout lines for magnetic stripe and other lines for chip transactions.
"It would be great to have that speed line for [contactless] transactions," he said.
The concept is ideal for certain restaurant segments such as fast casual and quick-service restaurants. McDonald's has accepted contactless payments for years and was an early Isis/Softcard partner. Panera Bread continues to expand its mobile payment efforts.
"When customers have their good and they're ready to leave, they're ready to leave," said Gregory Burch, who is vice president of strategic initiatives at Ingenico Group. "All of our customers want the payments experience to be as seamless as possible and the scenario you're painting really allows those who have contactless to have a seamless experience and potentially have it streamlined."
Supermarkets also come to mind, as well as big-box retailers such as Kohl's that already accept the major third-party wallets.
"I think it could work for certain brands," said Michele Dupré, the group vice president of retail, hospitality and distribution for Verizon Enterprise Solutions Topics.
Dupré believes that merchants could take a store-specific approach to contactless-only checkout lines and determine where such transactions happen most.
"It all goes back to the customer experience," she said. "If they see they can improve the customer experience in that particular market or that particular store by having mobile-only checkout lines, it's worth pursuing and it's worth looking at."
Burch said a merchant shift to some contactless-only checkout lanes would be a complete about face from the technology's early days.
"We had customers tell us they had a contactless terminal outside their drive-thru window and nobody tapped to pay, so they removed it," he said.
But now, two areas have emerged to put the focus back on the contactless transaction: EMV and mobile wallets. Canada and the U.K. have each experienced increased contactless transactions, both card and mobile, since their respective EMV transition. Burch believes the U.S. will be no different in time.
"U.S. consumers can be time-sensitive at the checkout lane," he said. "I think that it's natural that people will want something faster than inserting a card and contactless is going to be the answer."