how will mobile payments effect retail

How Will Mobile Payments Effect Retail

How Will Mobile Payments Effect Retail

Mobile Payments that use near field communications (NFC) have been in the headlines since Apple announced Apple Pay.

What is Apple Pay?

Apple Pay was introduced as a way for iPhone 6 and Apple Watch users to make in store payments without their wallet. The Near Field Communications antenna built into iPhone 6 allows users to pay for transactions through the Touch ID on their phone. A vibration and beep is sent to let the user know that payment has gone through successfully. For the Apple Watch, this is done by double clicking a button on the device.

Apple Pay has also made it easier for users to shop through apps, with checkout made by selecting Apple pay and then placing their finger on Touch ID, for iPad users. The iPad option is for shopping on eCommerce sites, not for using in-store.

What About Android Users?

One alternative for Android users is Softcard (formerly Isis Mobile Wallet). Softcard is an app which features a pin protected mobile payment option. User tap to pay the contactless symbol when they are in a retail location which accept Softcard payments. Softcard also holds loyalty, membership and rewards cards.

Are Retailers on-Board?

Apple Pay and Softcard will only work if retailers invest in the technology to allow their customers to use them. Each device reader costs between $300 and $500. All transactions are tied to credit cards, which mean additional fees for the retailer (although it would be reasonable to assume the consumers paying this way would have paid by credit card anyway). Retailers including Walmart, Kmart, 7-Eleven, and Best Buy are working on their own mobile payment app called CurrentC, and will not support Apple Pay at this time. Rite Aid and CVS both disabled their NFC readers to prevent Apple Pay and Softcard transactions, due to their commitment to CurrentC.

CurrentC, allows users to withdraw directly from their checking accounts by using a QR code which displays on their device. CurrentC is attractive to retailers because it does not use credit cards, which mean the retailers do not have to pay the credit card fees.For consumers, the best part of CurrentC may be that discounts and coupons are automatically applied to their purchase. They can also check their receipts on the app.

However, even though it is has not yet been released, CurrentC already has privacy concerns for consumers. By holding receipts, one concern is that CurrentC is made to track buying behavior. Another issue some critics have is that the app asks users for their health data.


Apple Pay and Softcard are more appealing to the consumer, who can link their credit card for convenience, and keep their privacy protected. CurrentC is more attractive to the retailer, because it helps them to eliminate credit card fees. Until both consumers and retailer are excited about the same payment method, no payment method will dominate the market.

For more information on how retail brands are engaging with customers through technology, please visit our portfolio.

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