Without a doubt, data is the most overlooked aspect to mobile payments, with perhaps the largest potential. In the age of big data, smartphones have become particularly integral, being able to retrieve information on anything from one’s checking account to the new brand of yogurt at Trader Joe’s. The data-yielding nature of shopping and payments creates opportunities in retail and dining as paper-based assets are replaced with technology-enabled capital like NFC tags, electronic dashboards and digital receipts. As has always been the case, the key to widespread adoption of mobile at the point-of-sale is receiving buy-in from the consumer, which means providing value-add features that make his life easier rather than annoy him.
One place to start is giving consumers a way of keeping tabs on their financial condition as they go about their shopping. A good portion of the younger generations are familiar with personal financial management (PFM) tools like Mint and Personal Capital that provide consumers with insights on their spending and cash flow. Third party providers like those mentioned above can build on their current offerings by making insights available immediately after a purchase. Such technology is already being piloted by banking startup, Moven, which (through its mobile app) displays transactional detail and spend analytics directly after making a purchase with its NFC-based smartphone sticker. By partnering with Mastercard PayPass, Moven has become a pioneer in real-time PFM and is exploring other growth areas in financial technology like peer-to-peer (P2P) payments and digital receipting.
By capturing itemized detail on a digital receipt, consumers are able to develop a history of the individual products they buy, rather than just the amount spent at a given merchant. Timestamps and reference notes appended to digital receipts can serve as a record of when and why shoppers purchased goods, in addition to the location of purchase. Strung together in an easy-to-understand dashboard, these real-time analytics have the potential to create a more informed consumer with minimal effort required on his part. After checking out at Wal-Mart, you might learn that the steep charge was driven by high spending on bottled water, which has attributed to 35% of your grocery budget overage this month.
Perhaps more important to the consumer than post-purchase insight is receiving insight before making a purchase, which is more than possible through NFC or QR-enabled delivery of product information. At a restaurant, a diner can use NFC tags from the menu to look up ratings and nutritional information on an entrée before selecting it directly through her smart phone. Access to this type of information gives consumers the power to compare products at one retail outlet to those at competing stores. Before buying a purse at H&M, a shopper might scan a QR code to see which of her friends bought the same brand and which bought similar brands. By leveraging NFC and QR codes in stores, there are no bounds to the information that shoppers can retrieve before making a purchase.
As you might have guessed, merchants are just as interested as consumers in the data supplied by a mobile wallet. While the vast majority of retailers and restaurants already capture consumer sales data, many would be open to integrating their current systems with mobile wallets. By syncing up with a consumer’s mobile wallet, the merchant gains access to consumer-specific data beyond sales numbers. Additionally, the data provided by the all-in-one mobile wallet is likely to be more accurate and up-to-date than the information maintained in the merchant’s independent loyalty program.
As of now, consumer data stored in information systems tends to be messy, with different names tied to different cards, old addresses and outdated contact information. As a regular customer at Golf Galaxy since middle school, I probably have two or three Advantage Club accounts, as a result of accidentally enrolling in the program more than once over a ten-year span. My first name might be in their system as both Michael and Mike, paired with two of the six addresses I’ve had since high school. This is a problem of customer master data and the result is poor business intelligence, forcing some retailers to purchase expensive data reconciliation tools like IBM InfoSphere.
With data consolidation a key aspect to the winning mobile wallet, retailers have the potential to inadvertently improve master data in its information systems by syncing to a mobile app each time customers make a purchase. Instead of a Golf Galaxy account serving as the golden record of information, my financial accounts, current address and contact information are stored in the mobile wallet app, preventing duplicate entries of my information in their system. Of course, the problem of sloppy analytics arises if a consumer is to switch mobile wallets (and if there are too many mobile wallets on the market then we have a problem in and of itself).
In addition to improving the quality of their basic consumer data, merchants can bolster their ad offerings by collecting data on anything consumers are willing to release from their mobile wallet or smartphone. For example, Facebook has been a popular source of data for businesses when connecting with consumers through the web. Information pulled from a consumer’s social media accounts – check-ins, pins, tweets and the like – could prove invaluable to merchants as customized offers are pushed to consumers at or near the point-of-sale. The pin of a picture of Mariah Carey on Pinterest might drive Macy’s to push a special offer for her perfume to that user as they walk by an outlet later that day. Purchases made by a consumer’s friends can also give merchants bait on what to put in the face of that individual.
Advanced technology in marketing software may even enable merchants to suggest beach products for the upcoming Caribbean vacation you have stored on your phone’s calendar. There are obvious privacy concerns related to consumers not wanting to share their tweet to a friend about weekend plans, or share items stored on their calendar. In all likelihood, a trusted mobile wallet would require consumers to opt into sharing data from select sources. With sensitive financial and personal information all stored in one mobile app, security will be of utmost concern by the consumer as the mobile wallet battles play out.
Up until this point in time, consumers have neglected most attempts at mobile wallet offerings for use at the physical point-of-sale. In all fairness, it is difficult to a) visualize the benefits until trying the product in action and b) believe that such a product can be rolled out to the general mass in an affordable and easy-to-use package. However, to put it in perspective, just the idea of having instant access to e-mail and bank account information from your phone was unimaginable not even ten years ago. A winning mobile payments solution will include elements of data and analytics like those described above that come off as both cool and convenient to the consumer. The race is on for mobile wallet developers like Square, PayPal and LevelUp.