Without a doubt, smartphones are becoming our “go-to” payment method. Banks, technology providers, telecom companies and app developers are all chasing the dream of creating the ultimate mobile payment solution, one that is truly universal. While smartphone usage is expanding every day, entrepreneurs are also coming up with creative ideas to corner the market, including technology that won’t even need phones in order to experience mobile payment. However, even as mobile payments become more convenient, creating a frictionless customer journey and making customers more loyal at the end of that journey looks like the real challenge. What software or hardware will bring out the universal solution for mobile payment and generate loyalty at the same time? With smartphone penetration expected to surpass 1.5 billion in 2017, the search for the answer is pressing.


      In a recent survey conducted by Edgar, Dunn & Company, respondents identify two major challenges facing mpayment: “Mobile payment has no business case and nobody needs it”.  The survey, found in Advanced Payments Report, also points out that there are too many players in this arena and security still remains a big issue.


However, what we have experienced is a revolutionary change in consumer behavior. Hindsight is 20/20 and no survey or focus group ever mentioned mobile payment back in 2001 just as nobody knew what iPods actually meant for the future of mobile market.


      Today’s consumers are no longer fond of pulling out cash and carrying around all that change in their wallets. Still, don’t you want to get rid of the complexity of all those cards? We are always on the move and just want to get things done as quickly as we can. But, for all of their convenience, mobile payments can be more complicated and time-consuming than just taking out a credit card. Smartphones bring about the best solutions, but we still want the whole process to be as simple as it can be. We are also witnessing the quickening of the evolution of awareness. This means, we do want to get things done quickly but at the same time we want to be rewarded in return for using these life-simplifying tools in our pockets. If we are downloading and/or purchasing an app, we also want to be able to take more advantage of this exchange. After all, we are human beings...


      But when it comes down to technology, there is an obvious a battle between NFC, QR Code/2D Barcode, Bluetooth or cloud-based payment systems. Regarding operating systems, Android is becoming more common even though iOS is still the leader.  But Apple is not considering integration of NFC into its devices. PayPal and Apple, both supporters of cloud-based solutions, have thrown their considerable weight behind Bluetooth Low Energy (BLE).


Although there’s strong support for NFC-based solutions, the lack of NFC-equipped hardware—especially in EMEA markets—still remains an obstacle and a huge cost for merchants to implement. Therefore, outside of Japan (NFC’s place of origin) and other specific country markets within the Asia-Pacific realm (e.g., Singapore, Malaysia) and EMEA (e.g., France, Germany, Turkey, Ukraine) activity in the NFC ecosystem is rather limited.


      On the other hand, since no NFC chip is required, QR Code based mpayment systems are still widely accepted. Business Insider recently reported that Starbucks’ mpayment and loyalty app program is used by 10 million customers with an average of 5 million weekly transactions in US stores. This app has proved that a smooth customer journey and enhanced loyalty may be possible with a convenient QR Code solution as well. iPAYst, a German QR based mpayment system also has promising solutions for end users. The app puts an end to carrying around physical cards of any kind with utmost security.  It also integrates social media, couponing and loyalty programs, which add huge value to customers and merchants.


      Bluetooth Smart has benefits beyond the counter too. Apps like Shopkick has already proved this with countless benefits for shoppers just by roaming around many retailers in USA, such as Target, Best Buy, JC Penny and others. Retail stores especially are emphazising the necessity of mpayment and loyalty.


Altan Bulur / CCO


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