Retailers are aware that there is a major shift currently happening in the payment industry. With the rise of credit card theft and technology ever-increasing, it appears that data criminality is not going anywhere, anytime soon. More and more consumers are starting to leave their credit cards at home, favoring mobile payments and digital wallets. Through the various mobile payment applications like Apple Pay and Android Pay, individuals can carry out everyday transactions through their smartphones.
Outside of becoming popular and trendy among consumers, mobile wallets come with their own unique set of benefits, especially for merchants in the retail sphere. Mobile payments are a great way for retailers to optimize operational efficiency and improve customer experience, all while keeping their costs low. Offering mobile payments provides significant advantages for retailers of any size.
Here are a few key benefits that mobile payments have to offer:
- Improved Payment Security: Retailers have been mandated to update their POS systems to accommodate EMV as per the EMV Liability Shift two years ago. Merchants who fail to meet those guidelines could incur hefty fines if they are impacted by fraudulent chargebacks. According to a study by the National Retail Federation (NRF), many retailers missed the imposed EMV transition deadline. The biggest reason among them was cost. The NRF estimated that the transition to EMV-enabled POS technology could cost retailers $30 billion collectively. However, mobile payments could eliminate those EMV costs altogether. Most mobile payment providers have updated their processing technology to accommodate chip cards and offer liability shift protection as soon as the merchant orders the contactless chip card reader.
2. Increased Checkout Speeds: Customers want fast and easy service. Typically, paying is the least favorite part of a customer’s experience. A lot of customers find that it is quicker to pay with a mobile device than a credit card. Customers who do not have to wait in a long line are more likely to visit that retailer again. The biggest advantage to faster checkout speeds are increased profits. If a retailer is able to accommodate more customers, then they can make more sales. Say a customer leaves their wallet at home or in the car, the merchant can let them know they offer mobile payment and make another sale without that person having to leave the line or the store entirely.
3. Better Track Customer Trends and Inventory: A typical struggle for a smaller retailer is tracking inventory and keeping up with customer trends. With mobile payment services, these processes are automated and help to better serve customers. Small businesses that are utilizing mobile payments can track what product and services they are selling to analyze customer demands. Not only can they capture payment information, but they can also use that information to create promotions, track inventory, and keep up with what their customers are buying the most of.
There a number of important benefits for businesses that make a mobile investment and get it right. Retailers need to have a mobile strategy in place to meet the demands of the hyper-connected consumer base that expects their favorite places to offer the latest and greatest payment technology. Having an effective and smart mobile strategy will increase in-store purchasing. A Forrester U.S. Mobile Payments Forecast found that U.S. mobile payments will reach $142 billion by 2019. As more and more consumers latch onto mobile payments and wallets, retailers will need to keep up with their ever-evolving expectations and demands.