Why Mobile Payments Are Still a Big Mess

August 31, 2016

11:45 am

You’re at the grocery store, ready to make your payment. You swipe your card. It doesn’t take. You swipe it again, still nothing happens. The cashier peers over at your card. “Oh, that’s a chip card. You have to insert it.” they tell you. So, you insert it, and minutes later it buzzes at you to enter your pin. You comply, and then it loudly buzzes at you to remove your card. During your next stop, you’ll have to figure all of this out again.

In the meantime, you’ve got Apple Pay on your phone, but you never get to use it. Why not? Because rather than working with smartphone companies to use their mobile payment apps, retailers are going proprietary and creating their own. In fact, you’ve probably got special cards, key chain tabs, or even apps for your favorite gas stations, coffee shops, and retailers. What a confusing mess.

Collecting Valuable Customer Data

So, why are retailers and mobile phone companies not putting their heads together? One of the reasons is customer data. That is the driving force behind the desire of retailers to create their own apps instead of accepting mobile payments. The data they collect from you is extremely valuable for them. Each transaction you make provides insight into your purchasing habits. That is gold for a marketing staff. Passing mobile payments of to cell phone providers is essentially giving up that gold.

According to Patrick Harter, CEO of iFixiBuy“The ability of a company to collect, store, and then mine customer data is key to growth. Brands who want to stay competitive are simply not going to want to give that up for any reason. Unfortunately, this means that customer convenience, especially at the checkout counter, is going to take a hit.”

No Rewards for You

Another issue is that many retailers tie their rewards and discount programs to their own proprietary apps and cards. This means that unless you swipe their card or use their app to pay at the cash register, you don’t get those rewards points or sweet discounts. Of course, the retailers aren’t all to blame for this. Mobile companies haven’t done enough to work with retailers to incorporate their rewards programs.

Content and More

Some of the apps that retailers have created offer more than rewards and discounts. They’ve streamlined the shopping process for customers in many cases. These apps have also proven to be a great tool for getting interesting and informative content out to customers. One example of this is the new app that was recently released by CVS Health. The app makes the process of filling, refilling, and tracking prescriptions exceptionally easy for pharmacy customers. That’s something that customers cannot get if they use Apple Pay. That’s a bit ironic considering that Apple has recently taken steps to move into the healthcare niche.

A Chip Card Opportunity Lost

Here’s the most frustrating thing of all. The rollout of chip cards has been an unmitigated disaster. There’s simply no denying that fact. A cooperative effort between retailers and mobile phone providers could fix that. Imagine being able to go to any retail counter and pay with your mobile phone. There would be no more fumbling through your wallet to find the right card, or pulling up one of a dozen or more retail apps on your phone. It would be a simple matter of scan and done. In the meantime, behind the scenes your discounts and rewards points would accumulate, and the marketing staff would receive the data that they crave. Even better, you wouldn’t  have to worry about some bloody pin reader squawking at you.

There’s a lot of great technology behind mobile payment apps, but the current methodologies are just a mess. If retail brands and mobile phone companies cannot put their heads together to come up with a one size fits all solution, maybe it is time for retailers to take a step back in the interest of customer convenience.

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Dianna is a former ESL teacher and World Teach volunteer, currently living in France. She's slightly addicted to apps and viral media trends and helps different companies with product localization and content strategies. You can tweet her at @dilabrien

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