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What do merchants think about mobile payments?

May 8, 2015

Merchants have mixed feelings about mobile payment solutions. 

Merchants in the United States will be required to upgrade their point of sale systems. Those failing to do so will have a few things to worry about. If fraud occurs at their stores, they will be financially responsible for reimbursing affected parties. Also, merchants that do not upgrade their point of sale systems will not be able to accept transactions from the latest in mobile payment technology. Consumers are increasingly interested in using their mobile devices as digital wallets, and retailers are aware of this trend. Countless chain stores now accept payment from services like Apple Pay and Google Wallet. Not having new POS systems could put a business at a disadvantage.

The transition to EMV technology will make mobile payment technology more popular
EMV chip-based cards will become widespread in the U.S. by 2017. This technology is already popular in Europe and Canada. The transition to EMV, according to PayVision, will make technologies like Apple Pay and Google Wallet more ubiquitous. Some merchants are nervous about the transition, however, because of the likely need for increased IT capability on their part.

At the ETA Transact 2015 Expo recently held in in San Francisco, merchants, PSPs, acquirers and banks all made an appearance – showing the importance that mobile solutions will continue to have in the world of e-commerce. Two frequently discussed topics were security and convenience, which is fitting considering that these topics most directly affect consumers. People today want to be able to pay for things quickly and easily, and they want to do know that their confidential information is safe and protected. New technology like tokenization was noted for helping win consumers’ trust in mobile payments. Apple Pay uses tokenization, a form of encryption, to protect customer data. Similarly, biometrics were mentioned as strengthening the case for mobile payments. Biometric fingerprint scans are better than PINs and signatures because they are harder to replicate and offer a layer of security in making purchases that was previously unavailable.

Not everyone is happy about the switch to EMV and mobile payments
Large retailers like Wal-Mart, CVS, Rite Aid and Best Buy have argued in the past that the number of new solutions in the mobile payments makes it difficult to keep up. They believe they are continually required to upgrade their systems, but is this true? To accept the new EMV chip-based cards, all that is needed is investment in POS devices that are compatible with near-field communications – the technology that enables contactless payments, whether by credit card or Apple Pay. Some merchants have decided to put off investing in new technology and pursue other things in defiance of popular trends.

PayVision discussed that, from a merchant’s point of view, there is no one-size-fits-all mobile solution. If that is true, then the emphasis should instead be placed on customer experience. The saying “the customer is always right” is particularly applicable in this instance. Merchants may have financial or strategic reasons to prefer one mobile payment technology over the other, but for consumers, there is only ease of use and security. Everyone that plays a part in the payments industry should understand that, ultimately, allowing consumers to save time and money should be the goal.

Does the Merchant Customer Exchange care about the customer experience?
The MCX was created by large retailers who sought to avoid accepting mobile payment technologies like Apple Pay. Instead, the MCX turned off their NFC-scanners and began developing their own technology. A major incentive for them, however, was that they could avoid paying transaction fees associated with credit card transactions. Alternatively, their mobile payment program – CurrentC – links to a customer’s bank account, thereby eliminating the need to pay the 2 to 3 percent charge to banks. MCX members do not accept any other mobile payments schemes at a time when the market is flooded with multiple options, noted PYMNTS.

Andy Shober, speaking on behalf of the MCX, did not mention transaction fees as a reason for developing CurrentC. Instead, he said the customer experience was the primary driver, reported PayVision.  

“We really don’t believe consumers will get that excited and if you look at the success stories in mobile payments you see merchants that have done something to really change the consumer experience such as Starbucks, and how they tie loyalty into it so that consumers feel rewarded, creating a better relationship between merchants and consumers,” said Shober, according to the news source. “Well, that’s what it takes to make mobile payments successful.” 

RetailSolutionsOnline.com pointed out that one of the MCX members recently changed directions. While Best Buy still has an allegiance to CurrentC, it will now accept Apple Pay as well. 

“Today’s consumers have many different ways to spend their money and we want to give our customers as many options as possible in how they pay for goods and services at Best Buy,” the company said in a press release.

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