A DILLEMMA IN MOBILE PAYMENTS

So, you have been watching the exploding mobile pay market. As a user or an executive, you wonder what's the difference between different systems and apps. There are so many differences it can make your head spin. If you are a retail executive, you must sort through all the choices trying to decide which to use. If you are a customer, you have no choice, but you like some more than others. So, let's take a closer look to help you make the right choice.

The decision on which mobile app to work with is an important decision. Some are sleek. Others are clunky. Some are quick. Others are slow as molasses. There are many items you must choose from, but here is an important something to think about.

The first item on your list should be to find an app your customers prefer. Period. That's because increasingly as mobile pay grows, customers will choose the retailer based on their ease of doing business and paying. And all mobile pay apps are not the same.

Differences in mobile pay apps

Let me explain the differences I have discovered as a user. When I walk into a Sprouts or Trader Joe's grocery store, or a QT gas station, using the mobile pay app is quicker, easier and more sanitary. All you have to do is swipe your phone, press a button on your display, and you are done.

Other similar stores like Racetrack gas station and Whole Foods also use a mobile pay app, but with this, you must press the keypad on their device to authorize the transaction. Suddenly, the sanitary part of the equation goes out of the window.

While that is not important issue to some, it is very important to others. Even President Donald Trump is a germ-o-phobe trying not to shake hands and always using germ killing wipes afterwards.

First, choose mobile pay app system based on what users like

Other systems don't have a reliable mobile pay system at all. There are many stores where sometimes it works and sometimes it doesn’t. And when there are other people in line behind you, there is little time to figure out the problem.

This creates a bad experience for customers. Something that has nothing to do with the store, but still reflects poorly on the overall experience. This can make the difference whether a customer returns or not.

Then there are larger stores who have stayed away so far. Think about your grocery stores, department stores like Target, Walmart, Macy's, Sears and so on. Ultimately, every retailer will have to use these mobile pay apps or they will lose business. Today, we are still early in the game where early users have a competitive advantage.

OmnyPay helps Kohl's strengthen app business

There are also stores that have taken an aggressive, growth oriented path. Look at Kohl's. Their shopping app was terrible. Then they started working with a company called OmnyPay and their results have been better than ever. Often times it takes working with someone who knows what they are doing in a new space.

So, if all mobile pay apps are not created equal, how can you choose the best system for your business? The first item should be, which is best of class in the space from the customer perspective? They are not all the same.

There are a few top companies to consider. They should be the only ones you consider. As time passes and others get better, that list can expand. But for now, choose the friendliest systems first from the user perspective, then from yours. This is a new and confusing sector, so find the right people to help you.

As mentioned above, there are two types of mobile payments: online and at physical POS.

Physical POS refers to methods such as Apple and Android Pay. There are several other companies also offering these services, for example, MasterPass (from MasterCard), Samsung Pay and Chase Pay (courtesy of JP Morgan Chase). Most physical POS payments work by utilizing the Near Field Communication (NFC) technology found in most smartphones and is the same technology in your contactless debit/credit card.

The card information is not stored on your phone or given to the merchant. Instead, it creates a 'token' – replacing your card details – which is given to the merchant, making the transaction itself very secure. Apple Pay takes security a step further, requiring all transactions to be verified by fingerprint ID or passcode, whereas with Android Pay you just need to make sure the phone is unlocked and hold it to the contactless terminal.

Apple and Android Pay are also versions of 'mobile wallets' allowing you to store more than one card in them and chose which one to pay with.

Another new piece of technology currently being rolled out across the US is the 'cardless ATM.' This works using a mobile or ‘digital’ wallet, whether that be Apple/Android/Samsung Pay, in the same way you would in store – with all the same security procedures – by selecting the card you wish to pay with and tapping your phone on the contactless reader. An added security step here will actually involve having to enter the corresponding PIN at the ATM for the card that has been selected, a method a lot safer than using a card at an ATM, which can be skimmed, stolen in a ‘distraction fraud,’ or even just left in the machine in a moment of forgetfulness.

Mobile e-commerce makes good use of mobile wallets that can be used on mobile websites or through apps, appearing as the option, for example, 'pay with Apple Pay.' Other choices are also fast appearing, with the option to pay for something online using, for example, Amazon, PayPal, or Facebook. Such options are becoming more popular, as they enable a 'one-tap' checkout process as all personal details are already present and all that is required is to sign into your Amazon/Facebook/PayPal/mobile wallet.