Understanding the Mobile Wallet: 3 Things Retailers Must Know
Mobile operators and industry giants from Google to Apple to Visa are creating their own solutions and facing steep competition. For example, the recently announced Google Wallet will use NFC chips embedded in Android phones to enable easy, contactless payments. With Google Wallet, consumers can wave their smartphones in front of NFC readers to make purchases at select retail locations, and even receive coupons or product information. This still requires retailers to install NFC readers at the point of sale, however.
Retailers possess a distinct advantage because they control their own networks and NFC offers. Providing incentives and rewards will help get consumers on board. For example, Starbucks launched a loyalty card program embedded in a mobile app that enables consumers to manage their accounts, find local stores and even make mobile purchases. Whether offering location-specific offers, comparison shopping applications or payment options, retailers can make the shopping experience much more convenient and effective with NFC.
That said, retailers want to be assured that mobile wallets will drive higher revenues and lower costs over time. What the market currently needs is a standard payment instrument, hardware and network to support it.
3. A ‘hub’ eliminates market barriers. While a retail brand might be ready to dive into the mobile revolution, the complexity of establishing relationships in the vast mobile ecosystem often delays or halts progress. In addition, many companies are vying to establish standards for their own payment solutions while tackling consumer concerns over security and privacy. Brands must address these issues with a business model focused on resolving market inefficiencies and fragmentation. A mobile hub solves these problems.
With a hub, brands can reach a broader consumer base encompassing all wireless customers. As mobile operators are the gateway to mobile subscribers, a hub also helps operators relieve commercial, credit and fraud risk by managing thousands of merchants that interact directly with consumers. For example, a hub could help Wal-Mart interact with their customers — regardless of carrier — by easily managing multiple and disparate operator connections. By eliminating cost and inefficiencies, operators can better support subscribers at a lower cost and connect them with their favorite retailers.
