Mobile payments and kiosks: The perfect match?
Editor's note: This article originally appeared in Kiosk Marketplace, a Mobile Payments Today sister publication.
One reason kiosk industry observers are optimistic about 2017 is that technology is providing more ways to improve the customer experience. A consumer trend that is expected to impact the kiosk industry is the growth of mobile payments. Mobile wallets can offer consumers enhanced security features, faster checkout and loyalty rewards integration.
While the degree to which mobile payments will dominate consumer buying remains uncertain at present, many observers believe mobile payments is an option that kiosks need to offer to meet changing consumer needs.
This past year, 38.4 million Americans 14 and over used their mobile phones to pay at the point of sale at least once in the preceding six months, according to eMarketer. That represents 19.4 percent of U.S. smartphone users. By 2020, that figure is expected to grow to 33.1 percent of smartphone users.
Kiosk operator embraces mobile app
Continental Café Inc. in Troy, Mich., recently began offering the newly-introduced Avanti Markets micro market payment app, according to Jim Belisle, senior vice president and CFO of Continental’s vending, coffee and market operation. The company promotes the app on the kiosk screen. Customers find the app easier to use than a payment card or a thumb print reader.
There are also benefits to the kiosk operator. The more people use apps, the fewer Avanti payment cards the company has to issue.
"If you have that, we don’t have to buy the little market cards on the Avanti side, so there’s a savings on that end," Belisle said. "It’s a little bit easier for people because they always have their phones – they don’t have to have that card."
Mobile payments also gives the company a new way to market to customers. "The biggest thing we’ll be working on soon is the customer engagement piece so you’re able to communicate directly with them, via email, via tweet, whatever it is," Belisle said.
Nevertheless, customer response to the app has been slow, Belisle said.
"In some of the younger populated locations, they’re sticking with their credit card of choice which also has its own reward programs; they can focus all their spending that way," he said.
"We’ve seen a great deal of curiosity so far, but not an equivalent amount of interest, if that makes sense," said Frank Olea, president of Olea Kiosks Inc., a kiosk design and manufacturing company. "We believe Apple and Google need to do a better job at explaining how easy it is to pay by device—phone, tablet, watch—in order to help overcome some of the trepidation that’s stymying broader adoption."
An added option, not a replacement
Several observers said mobile payment adds an option that will help consumers, but will not be replacing traditional forms of payment, including cash.
"Mobile payments are another opportunity and option to improve conversions," said Laura Boniello Miller, director of marketing at KioWare Kiosk Software Analytical Design Solutions, Inc., a kiosk software provider. "Integrating mobile payments into kiosks, and looking at mobile payments as an 'and' rather than an 'or' for customers is critical to our place in the world of POS/retail service."
"Cash, credit card, checks, mobile payments and other payment methods (Paypal, Venmo etc.) should be seen as opportunities to make purchasing easier," Miller said. "As an industry, we should not be threatened by the expansion of choices, but embrace them and continue to find ways to be inclusive of switching from one method to another – the customer should have the choice of how they want to pay."
"More payment options are always being requested, but mobile payment requests have not reached the tipping point," she said. "We can add this capability upon customer request, but have not yet needed to do so."
"It (mobile payment) is definitely something we’re going to see more and more of," said David McCracken, president and CEO at Livewire, a kiosk software provider. "The integration between the kiosk and the mobile world is going to grow larger."
McCracken doesn’t see mobile payments replacing kiosks. "You still can’t put cash into a cell phone," he said. "You can’t dispense things from a phone. All the things you need a kiosk for today are still going to apply. It just may change the way some payments are accepted."
Michael Ionescu, president of Ionescu Technologies, a kiosk software provider and operator, said most people don't use smartphones for every task, leaving a lot of room for interactive displays. "The average person uses less than a dozen apps on their smart phone," he said. "They trust the thing that’s there that’s meant to do the job. There’s so much more use for interactive stuff than people might give it credit for."
Todd Marcelle, founder of GoMoto Inc., a cloud-based, customer engagement technology provider for automotive dealer showrooms, doesn't see mobile payments replacing kiosks in automotive showrooms and service operations. "Some consumers will prefer a mobile-based experience," he said. "Some will prefer a tablet or a kiosk-based solution. So you have to have those different avenues to be able to provide for your consumers."
"Relative to the financial services kiosk offering, we see it as a marriage," said Bob Frimet, managing member at Kiosk Prepaid LLC, a kiosk provider. "The unbanked consumer has access to cellular devices, but not necessarily access to the necessary tools to make payments such as credit or debit cards. We believe there is an opportunity to merge the two in offering those customers the ability to be able to make a debit card purchase at a kiosk and then use that debit card to conduct business through their phone while still realizing income through the kiosk in addition to allowing the customer to use their cell phone to interact with the kiosk on certain levels."
Cash is still needed
"The general population still requires cash and printed documents of all kinds," said Suzi McNicholas, vice president of marketing at Source Technologies, a provider of integrated solutions for financial transactions and other business processes. "Cashier's checks and money orders are still required for many transactions to be successfully completed, and a recent study by Bloomberg confirms that 'cash is still king of the world.' Paying via mobile may be popular, but not every single payment can be made that way."
"Despite the discussions on the demise of cash, and emphasis on mobile payments and EMV, cash transactions are not going away," said Rick Kobal, SlabbKiosk’s U.S. sales director for finance. "The usage rate of cash by millennials is a data point supporting this belief."
Doug Obal, director of sales and marketing at Technik Manufacturing, a custom kiosk manufacturer, said most of the equipment his company makes features a product dispensing mechanism. Hence, he doesn't see ecommerce replacing these kiosks. "They (end users) are buying product from the kiosk," he said. "I don’t think we have too much problem with people purchasing items through Amazon or something."
"It’s either an interactive kiosk where you’re not buying anything; it’s all informational," Obal said. "Or, it’s a kiosk that’s dispensing some type of product."
The company has not fielded any requests for mobile payments acceptance, he said.
Terri McClelland, CEO at DynaTouch, a technology integrator and developer for self service solutions, said mobile payment technology will impact kiosks in different ways. "In some ways, yes," McClelland said when asked if mobile payments threaten kiosks. "But there are so many kiosk apps where payment is just one piece of the total solution. Take order entry, for example. And don't forget about those who don't have credit cards or checking accounts, probably more than you think. Payment kiosks that accept cash will never be replaced by a personal mobile device."
"We are getting payment solution requests of all kinds: mobile wallets, mobile websites, the list goes on and on," McClelland said. "The trend has been apparent to us for a few years now and we are taking additional steps to meet the demand. We already have the only network certified secure browser software for DoD (Department of Defense), VA (Veterans Administration) and Social Security Administration. Now we can add things to our tool set when they make sense."
Whether or not mobile payments will replace some kiosks will depend on the application. In the automotive sector, personal interaction with a dealer is still necessary, even if the sales process begins on a computer, Marcelle of GoMoto said. "What you should be able to do is seamlessly pick up your experience where you left off and continue that in the dealership," he said.
Elliot Maras / Elliot Maras is the editor of KioskMarketplace.com and FoodTruckOperator.com.