Written by André Stoorvogel, Director, Product Marketing, Rambus Payments
We predicted that 2017 would be the year of ‘Mobile Payments 2.0’, with seamless payment methods, value-added services and alternative payment channels coming to the fore. As we move into the second quarter of 2017, and with the annual pilgrimage to Barcelona for Mobile World Congress providing unparalleled insight into the state of the mobile payments industry, what better time to take a moment to reflect on what we have learned from the year so far, and the key trends and technologies driving progress and innovation.
The importance of VAS
In the early days of mobile payments, some industry players saw digitizing a physical payment card onto a mobile device as the endgame. They anticipated that the convenience it afforded would lead to mass uptake.
The reality, however, is that many consumers expect to be able to make contactless payments. And as the mobile payments market matures, it has become apparent that further incentives are required to fuel adoption.
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 (VAS) such as rewards, loyalty, gift cards and couponing.
On the show floor at Barcelona, it was clear that the industry has recognized this trend. For example, we unveiled the Rambus Unified Payment Platform, which enables retailers to digitize multiple credit cards, gift cards, loyalty points and coupons into a single, secure retail wallet. By securely converting and managing various digital values, it enables consumers to pay with credit, points, and coupons all in a single transaction.
It should be noted that 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. Deploying VAS also enables 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.
A point-of-sale revolution?
Historically, the onus has been on mobile payments solutions to integrate with the existing point-of-sale (POS) infrastructure and established checkout methods.
With the traditional in-store checkout experience becoming increasingly outdated, however, the mobile industry is now taking the lead in redefining the way we pay.
For example, Accenture’s Mobgen exhibited the world’s first in-car mobile payments system to enable seamless at-pump payments. Mastercard also announced a partnership with Oracle to deliver support for advance ordering and collection.
In-aisle payment technology is also 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. Not only this, but retailers also benefit from lower overhead costs and a reduction in POS terminal requirements.
Retailers enter the game
The shift from the processing of payments to a more meaningful buying experience is also impacting the overall dynamic of the mobile payments market.
As mobile network operators, device manufacturers and financial institutions jostled for position in the emerging mobile payments ecosystem, retailers found themselves excluded from the conversation. When combined with the struggles of certain high-profile retail wallet ventures, there was a sense that retailers were behind the eight ball.
Not anymore. Retailers are now perfectly positioned to drive the mobile payments industry forward and deliver the VAS that consumers demand and expect.