Accelerating mobile payment adoption with value-added services
This entry was posted on Wednesday, August 16th, 2017.
André Stoorvogel, a product marketing director at Rambus, has written an article for Finextra about accelerating mobile payment adoption with value-added services.
“As the high-profile success of mobile applications such as Starbucks attests, the key driver of mobile commerce is the efficient deployment and integration of value-added services such as rewards, loyalty, gift cards and couponing,” he explained.
“[Moreover], the deployment of VAS has huge upsides for retailers. They can easily leverage integrated loyalty points and coupons to boost revenues through cross and up-sell opportunities. [In addition], value-added services enable direct access to powerful shopping data, which can be utilized in the development of new services to provide consumers with a hyper-personalized buying experience.”
As we’ve previously discussed on Rambus Press, value-added services such as loyalty programs, coupons and gift cards are a fundamental aspect of the in-store shopping experience. However, in the U.S. alone, there are 3.3 billion loyalty program memberships at an average of 29 memberships per household. This complexity means 58% of all loyalty program members do not actively participate.
A digital wallet can help simplify this complexity and allow both retailers and consumers to derive maximum value from value-added services. For example, retailers can digitize credit cards, gift cards, loyalty points and coupons into a single, secure platform. By securely converting and managing various digital values, consumers can then pay with credit, points and coupons in a single transaction, controlling the ‘payment mix’ according to their requirements.
In-aisle payment technology
Along with value-added services, says Stoorvogel, the mobile industry is also helping to redefine the way we pay, with the concept of in-aisle payment technology steadily gaining momentum.
“By combining the in-store experience that customers value with the in-app convenience they demand, in-aisle payments streamline the checkout process and reduce drop-off rates,” Stoorvogel added. “Not only this, but retailers also benefit from lower overhead costs and a reduction in POS terminal requirements.”
As we noted in our recent eBook (“5 Reasons Retailers Should Have Their Own Digital Wallet”), 86% of consumers avoid stores with long queues and 70% would be unlikely to return to a store if they were previously subjected to a long queue. In addition, 38% have abandoned a purchase due to excessive queuing times. This issue is particularly pertinent for retailers, as consumers are more likely to drop out of a retail queue than for any other good or service. To compound the problem, assisted checkout lanes require expensive infrastructure and are labor intensive.
This is precisely why self-checkout technology has emerged, with retailers looked to further streamline the process. Nevertheless, at this stage self-checkout is more of a stopgap than an endgame as the technology still requires consumers to queue, along with staff to monitor the costly equipment.
Personalized shopping experience
Last, but certainly not least, Stoorvogel observes that the shift from the processing of payments to a more meaningful and personalized buying experience is also impacting the overall dynamic of the mobile payments market. Put simply, data has never been more powerful. With a digital wallet, retailers have direct access to detailed shopping data, which can be utilized to improve and develop new services.
In addition, shopping data can be intelligently deployed to deliver a hyper-personalized buying experience. It can also leverage past and predicted behavior across numerous channels to deliver smart recommendations, while identifying cross and up-sell opportunities to increase transaction amount and enhance revenue.
“Retailers are now perfectly positioned to drive the mobile payments industry forward and deliver the VAS that consumers demand and expect,” he concluded.