Thanks for taking the time to read the second edition of the New Retail Technology Newsletter for August.
Thanks also to those of you who contacted me after the first edition, I really appreciated the great feedback and concern expressed over my unfortunate Achilles predicament. For those interested, my Achilles is progressing really well – I should be out of the Moon-Boot and (almost) back to normal in a week or so (still a fair bit of Physio to go though).
This edition will focus on what is currently happening in the Mobile Payments space that will have a huge impact on how products and services are going to be paid for in the future in the world of retail. So it is worth taking note of some the key trends. Firstly, Smart Phone adoption is skyrocketing around the world – in Australia the smart phone adoption rate is nearing 65% (and you can bet that is much higher in the demographics most retailers are focused on). Secondly, retailers are gearing up for Contactless Payment – currently being driven by Visa payWave and MasterCard PayPass, a new generation EFTPOS payment terminals are being rolled out that have the option for Contactless Payment (tap and go). Companies like 7 Eleven and bigger IGA supermarkets have had contactless terminals for some time and Coles has just completed rolling out 750 Supermarkets, while Australia Post is now rolling them out to over 4,000 outlets. The move to Contactless payment is being driven by customer convenience and speeding up the payment process. The Visa payWave ad captures this beautifully. See it by clicking here.
The feature this week will concentrate on some key events in Mobile Payments in the last couple of weeks. Starbucks decision to use relatively new start-up Square to process all Credit Card payments across all 7,000 outlets in the USA has some significance as it is the first time a major retailer (Starbucks) has partnered with a new generation mobile payments organisation (Square) to process all of their payments. This will replace Starbucks own internally developed mobile payment application and future functionality promised by Pay with Square is quite exciting (see next post).
The other major player in the Mobile Payments space is PayPal with their PayPal Here application – again PayPal are making some early, but significant inroads into retail that will also be very disruptive to the traditional payment services (Credit Card companies, Banks and Payment Networks). As interesting and disruptive as Square and PayPal are to retail payments, the one that has the potential to be the most disruptive will be Apple who will be launching the iPhone 5 in September that is rumoured to have NFC (Near Field Communication – contactless payment) capability utilising the new iOS 6 feature Passbook which could also be used to facilitate customer loyalty schemes, discount coupons and event tickets.
In Australia the major banks are also starting to get in on the Mobile Payment action with CBA’s Kaching, ANZ’s goMoney and Westpac’s PayWay. There are also numerous mobile application developers around the world building apps that will process credit card payments eager to jump on the mobile payments bandwagon and get a cut of each payment transaction, all of which will have the effect of driving the cost of processing payment transactions down (good for both the merchants and for the consumers). Some of the mobile payment names to watch are PayMate and iCCPay in Australia, GoPago in the USA and iZettle in Europe.
Ha, I’ve just pulled my copy Time out of the mailbox (still getting the print edition) and guess what is on the cover of this weeks edition? The Wireless Issue – 10 ways your mobile phone is changing the world. One of those 10 ways is mobile payments.
As Bob Dylan famously sang in 1964 “The order is rapidly fadin’/ And the first one now/ Will later be last/ For the times they are a-changin” is still very relevant for today.