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How to Establish Clear Leadership in the U.S. Mobile Payments Business

SUMMARY: In order to establish clear leadership in U.S. mobile payments market the app must enable non-cash payments and promotions, making fully digital Online-to-Offline promotions a reality. The importance of storing credit and debit cards is obvious, but today’s mobile payment apps are incomplete. First they are failing to acknowledge the importance of promotions. Next, they are failing to address the widespread use of barcodes. Most promotions use barcodes, but barcodes simply cannot be read from smartphone screens by laser scanners. The laser scanner is the most widely used scanner type in grocery stores and most drug and mass merchandiser chains. So today’s leading payment apps only replace bank cards. Shoppers must still carry loyalty cards, gift cards, and paper coupons. The mobile wallet is really just a mobile bank card replacement, and the checkout process using a mobile wallet is actually only a hybrid process that is still part manual using plastic and paper. For a 2-minute illustration of this, see https://www.youtube.com/watch?v=lscB9hnoeWg To become a true mobile wallet, the app must be able to handle all popular payment types, cash and non-cash, which means it must be able to communicate barcodes into the scanner as well as communicating credit and debit card information into the payment terminal. The payment terminal and scanner are different entry points into the POS system. They cannot be used interchangeably. Promotions cannot be input to the payment terminal, even with NFC, and payments cannot be input into the scanner. The following describes in more detail how this environment relates to the effectiveness of mobile payment apps. Some of the information may be obvious and/or known to ...

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