Apple and NFC: 10 key considerations for retailers
When Apple announces the next iPhone Sept. 9, most experts think it is somewhere between a probability and a near certainty that it will be capable of NFC payments. Most retailers are not well-prepared, though there is still time. There are several considerations, some of them obvious, others not so obvious.
- Reexamine your contactless strategy: Fewer than 15 percent of transactions are capable of using contactless technology. Retailers need to take a hard look at their approach to contactless, both in light of the potential Apple NFC release as well as the upcoming EMV network mandate that retailers accept credit cards with EMV chips. This means reconsidering the reader replacement and upgrade schedule, testing existing contactless readers to ensure they work, and making sure those readers are compatible with the new technology.
- Work with your POS software providers to ensure your POS is compatible: Some POS terminals are more “plug and play” for mobile payments than others. Speak to your POS software developer to make sure that mobile payments work seamlessly at checkout.
- Update store associate training: Store associates need to understand how mobile transactions at the POS differ from traditional payments. Until mobile payments are fully habituated, store associates will also likely need to assist consumers. Make sure they can do that without dropping a $500-plus mobile phone!
- Improve POS configuration and signage to hasten checkout: If users start pulling out their mobile wallet in front of the POS, it could risk slowing down the lines. Consider using signage both at the POS and before to prompt users to get ready before they get into the line.
- Implement an Android solution:Android accounts for about half of all smartphones (more than iPhone with less 4o percent). Admittedly, iPhone users are the wealthiest and most active users, but retailers still need a solution for everyone else!
- Determine strategies to reduce interchange:The good news is that (at least to date) prepaid cards have driven mobile payments. That could change depending on how Apple might implement a mobile wallet. Retailers should consider the role of their own private label and prepaid cards with regard to mobile payment.
- Reexamine your mobile commerce program: If your customers can pull out their phone to pay, they will expect to be able to use it for every part of their checkout experience including offers, coupons and loyalty programs. Merchants have several options for how they distribute, present and communicate them at the POS. They should also consider how their commerce programs integrate with Apple Passport.
- Learn how to effectively use mobile location services: Location awareness can be used to dramatically enhance the payment experience – from prompting the right offers to sending e-receipts. Micro-location (and iBeacons in particular) will also likely become an important component of the payments experience as well. Retailers who have deep knowledge of how these services work and how their customers respond to them can create enhanced mobile experiences at checkout.
- Experiment with in-store NFC tags: NFC tags allow users to tap a poster, shelf tag or even a product label to obtain information, get a coupon, or enjoy other mobile user experiences. Brands who have experimented with these tags have found them to be much more effective than traditional QR codes. They also have the benefit of habituating consumers in using their phone for something other than playing games.
- Capture learnings: There are many unknowns in the world of mobile payments. Most retailers will roll out changes, such as POS upgrades, in stages. Winners will systematically pilot, A-B test, and share lessons across stores.
Luckily, even with the release of the iPhone, things will not change overnight. There is still time to learn and experiment. However, mobile payments are not straight forward and those that begin early, systematically enable mobile payments and actively learn will have a leg up on their competitors.
Ed Busby / Ed is the founder of Hudson Mobile Advisory, a consultancy focused on mobile payments, commerce and advertising and teaches Mobile Marketing at Columbia Business School. He is the former Chief Commerce Officer of Isis, the mobile wallet for AT&T, Verizon and T-Mobile.