As shoppers explore a store, make a selection, stand in line, and get to the point of checkout, suddenly they are faced with an additional point of friction: Payment options. They’ve already had to make numerous decisions, and now another choice stands between them and the rest of their day.
This moment in the customer journey shouldn’t be one full of clutter and fumbling, instead, it should be seamless. Whether a retailer has an EMV chip reader, an NFC reader, an actual cash register, or something else, shoppers are faced with many answers to the question, “How will I pay today?”
That’s exactly why so many retailers have opted into mobile payments. Instead of shoppers flipping through cards in their wallet or counting out bills, they can just tap their phone and have the payment process in mere seconds.
While this sounds like the dream in retail; delighting customers with a quick and easy process, options abound for retailers, making payments more complicated than they need to be. Retailers should ask themselves: What mobile payment options do my customers want? And more importantly, which options will they actually use?
The future of mobile payments is now
Choosing the right mobile payment provider depends on the demographics of your customers, and it might take some trial and error to get those options right. But the fact of the matter is that mobile payments are here to stay, and following in the footsteps of retail winners will pave the way toward implementing them in the best possible way.
Shoppers have been catching on to the ease of mobile payments, as Retail Dive found 25.7% of US shoppers pay using their smartphone across channels. This number is only increasing and bringing the notoriety of mobile payments up with it.
In fact, global mobile payment transaction value is expected to reach $14 trillion by 2022. Needless to say, it’s time for retailers to understand mobile payments to avoid being technology laggards—frustrating customers by not offering forward-thinking payment options.
Learn from the best: How you can emulate mobile payment winners
There are some early adopters of mobile payments that have used their advantage to test the waters and get early wins. Starbucks is one of the most notable.
When news came out that Starbucks was the leading mobile payment app, sprinting past Apple Pay, Google Pay, and more, to say it surprised the retail world is a massive understatement. The staggering statistic that took retail by storm was that the Starbucks app-enabled sales from 23.4 million consumers in 2018, with Apple Pay as its closest competitor at 22 million.
So what exactly has Starbucks done since the launch of its app to pull in and retain that astronomical number of customers? Starbucks is doing countless things right to maintain this massive level of success, such as doubling down on their brand presence.
When a coffee lover opens the Starbucks app, they are easily able to order at a nearby Starbucks shop so that their beverage is waiting for them when they arrive. No lines, no cash, no hassle. And to top it all off, Starbucks was able to own the entire brand experience. The customer was never pushed to a third party to scroll through beverage options or complete payment.
Secondly, the Starbucks app is able to process payments from any device that’s able to run it: with no additional hardware required. Starbucks has created a hardware agnostic solution and other retailers need to take note. Another selling point of the Starbucks case study is transaction and margin control gained from running an internal mobile wallet.
Lastly, and potentially the most important point, Starbucks is able to own all of their customer data. Since they aren’t going through a third party provider, they are able to aggregate and act on their customer data. No more data silos or digging is necessary to understand what their customers like, and how to give them more of it.
Why retailers will catch on to mobile payments soon
Emerging technologies are taking retail by storm with hardware agnostic options. Retailers no longer have to invest in copious new technologies to present to shoppers at checkout.
As Starbucks has shown, owning customer data and the full customer journey is a profitable endeavor. The future of mobile payments is the future of retail, and retailers that infuse their payments infrastructure with new technology now will be the winners of tomorrow.
