Why EMV is the Best Thing to Happen Yet for Mobile Payments
The deadline nearly a year ago for retailers to have EMV payment capabilities deployed across their stores has come and gone and a surprising number of retailers have not yet upgraded their systems, despite the shift in liability for payment fraud to retailers not complying with the new standards. And even at those retailers who have shifted to EMV payment, the experience often leaves much to be desired.
I have to look no further than my own experience here in southern California at both national and local merchants. Ralph’s (Kroger) was one of the first retailers to shift to EMV but the payment process was painfully slow; while it has improved in the months since, it is still much slower than swiping. The local Pavilions store (Safeway, a division of Albertsons) only began accepting EMV within the past couple days. Many regional and local merchants have still not moved.
I would suggest that the poor experience provided by those retailers that did shift to EMV has helped encourage the adoption and use of mobile payment solutions. And certainly at those merchants that have not yet deployed EMV, we see a growing number accepting mobile payment. Again, in my local market, my observation is that more local and regional retailers are supporting mobile payment than EMV.
Speed, Convenience, Security
Consumer interest in paying via mobile is driven by several straightforward reasons: mobile is faster, more convenient, and more secure, especially when used with biometric authentication. Mobile payment removes the physical card from the payment process and almost by default provides a more secure transaction, removing any possibility of the card being copied or the info on it stolen.
Next time you’re in a store, observe people in the checkout line. You’ll be surprised how many of them have their mobile device in their hand, whether for referring to their shopping list, creating a social media post, checking messages, or just out of habit. The fact is mobile devices – particularly smartphones – are literally in-hand much of the day, including in the store.
A growing number of retailers are bringing mobile payment into their apps and combining it with their loyalty initiatives. Walmart has extended its Walmart Pay service to all of its U.S. stores. In recent weeks, CVS launched CVS Pay, pairing it with the company’s powerful rewards program. Building and maintaining a proprietary mobile payment solution is only appropriate for the largest retailers, and as we see with Walmart and CVS, companies are using mobile payment to add value to their mobile apps and give customers additional reasons for downloading and using the retailer’s app.
Other retailers are making use of the digital wallets provided as part of third-party mobile payment solutions. Walgreens and Kohl’s were among the first retailers to integrate their reward programs to Apple Pay, allowing customers to include the retailer’s reward cards in the Apple wallet. Starbucks has led the industry in showing the power of combining mobile payments with loyalty and reward initiatives; the company reports an estimated 21% of all its transactions are now being done on mobile.
Therefore, there is a strong incentive for a growing number of retailers to offer mobile payment: retailers wishing to avoid a painful EMV user experience combined with a desire to strengthen the value proposition offered by proprietary mobile apps. Mobile will play an increasing role in the brick and mortar shopping experience as retailers provide new services and relevant, personalized messaging to the customer in-store. This growing mobile presence provides the foundation for an increase in mobile payment.
About the Author:
As Founder and CEO of CART, Gary Hawkins has an unparalleled view to current and future innovation in fast moving consumer goods retail. Reviewing thousands of new solutions each year, combined with over 30 years of industry experience leading shopper-focused innovation across the supply chain, uniquely position Hawkins to guide the future of retail.
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