GiftCard Partners insights on the 2013 pymnts.com Innovation Project held at Harvard University.
GiftCard Partners Executive Management was recently invited to attend the 2013 pymnts.com Innovation Project, which brought together retailers, payments industry experts, and thought leaders in the payments space to discuss the future trends in the industry. What the GCP team noticed was the overall difference in the way mobile payments and commerce are viewed by retailers when compared to the view within the payments industry. Payments industry leaders believe that since 51% of Americans have smartphones, and 25% have tablets, that mobile payments will gain traction with consumers, and change the way they will interact with retailers in the immediate future. However, retailers have a longer-term view of how mobile payments will integrate into their relationships with consumers. Since retailers need to manage interaction between mobile payments technology and their existing point of sale systems, the process will take time. Although retailers see this as a promising future trend, they also see there being a longer timeline given the extensive work and investments necessary in order to integrate with existing retailer technologies. It became apparent that the key to solving the future of mobile payments is ensuring that all parties involved are working together. This type of joint effort works to create industry standards and benchmarks that will allow variety in the market within a standard structure that meets the expectations of retailers and payments industry technologists alike. Mobile payments are viewed as an imminent trend that will transform the way consumers behave and the way in which retailers will interact with them. Consumers already constantly use their smartphones in retail interaction, from purchasing through credit card transactions on mobile apps, to shopping online for a lower price while in a brick and mortar store, also known as the common “showrooming” trend. It’s crucial that retailers stay current with the latest in consumer mobile usage and interaction, reacting to consumer trends as they are happening, in order to stay in touch and maintain a current relationship with the consumers who drive their business. Retailers are especially interested in reacting to innovations in retail interactions when those trends can affect their bottom line. Mobile payments not only add convenience for consumers but will also save retailers money in the long run. Rosie Rios, United States treasurer, noted that over the next 10 years the United States Government will move to making 100% of federal payments electronically. The transition to electronic payments will save the United States $1 billion. These payment innovation savings are of interest to retailers as they look to the future of mobile payments, their future technology investments, and most importantly the future of their relationships with customers. The mobile payments industry is looking to innovate the future of retail from a different perspective. Mobile payments is a fragmented technology sector with a variety of digital wallets, loyalty solutions, and innovative mobile payments vendors trying to gain traction within the retail industry. Everything seems to be focused on “the next big trend” and while some are realizing that their success was only temporary, other ideas and concepts are mature enough to gain some traction. The mobile payments environment can be chaotic and there are a lot of viewpoints on how mobile payments should work, but it seems that the technologists can sometimes be bogged down with the details. It is important here to not lose sight of the bigger picture and the important question to keep asking; how can this concept be adaptable and usable enough for retailers to be ready and able to jump on board? There is a chasm between where mobile payments vendors want the industry to be and the reality of when retailers will be ready to accept it. At the Innovation project, there was a
ThinkaThon®, where GiftCard Partners’ COO,
Deborah Merkin, and her team was tasked with figuring out what “the next point of sale system” would look like, and mobile payments were a huge part of the solution. The team, partially consisting of Dean Seifert of Vantiv, Eric Holfman of ROAM, and Farhan Ahmad of Barclay Card, came up with a solution that could solve the growing pains of the payments industry. In order to bring mobile payments technologists and retailers together, they first needed to work together to find industry standards. Without the cooperation of the major parties involved, working together to standardize what this industry needs to look like, retailers are going to get lost in outside organizations strategizing for them without their input. When both pieces of the industry are brought together retailers can articulate what they need to fast track mobile payment adoption, leaving technologists to strategize and build the products retailers are looking to adopt. Formalizing clear and relevant points about what vendors have to offer, what retailers need from vendors, and how to bring those two critical pieces together, will put the mobile payments industry on the road to success.
