The Customer Remains King

Mobile payment offers many advantages over paying with traditional cash. However, it can only be successfully implemented where it is adopted by the customer. Christian Baumann, Head Value Added Services from SIX Payment Services, explains which incentives can help attract customers.

It is widely accepted that mobile payment methods are to be a firm part of our future. However, we’re not there yet. Across Europe, the public still relies on cash – indeed last year there was a public political discussion in Germany around Cash is freedom! Nevertheless, there is great interest in mobile payments, so much so that in a recent survey by PwC, 58% of Germans stated that mobile payments simplify shopping.

Ultimately, when choosing a preferred payment option, consumers make a cost-benefit analysis as part of their decision-making process. While there is a consensus that cashless is more convenient, if the registration to a service takes a long time, or the consumer has doubts about how their personal data will be dealt with, then, in their mind, the disadvantages outweigh the benefits. The challenge of implementing mobile payment methods which are genuinely attractive to the customer can seem overwhelming for many merchants. However, this is where payment service providers can help.

Regular customers want to be rewarded

Merchants are facing another issue that is more closely related to mobile payment than meets the eye: customer loyalty. Consumers' expectations have steadily increased over the years and their willingness to change suppliers has also risen. An established and effective way to motivate customers to visit stores on a regular basis is bonus programs. With each purchase, the customer can collect points which can later be exchanged for bonuses, discounts, vouchers or even cash.

For large merchants, this works very well. They have developed their own systems or created co-operations with other businesses. Small merchants, however, can often struggle to be included in these co-operative deals and developing unique bonus programs is rarely worthwhile. The number of transactions is too low, and very rarely are customers interested in collecting bonus points which they can only redeem at a single, small outlet. Indeed, small-scale operations are often unnecessarily complicated – meaning they can be more annoying to the consumer as opposed to increasing customer satisfaction! The way round this is to create multi-partner programs, which are open to smaller merchants as well as larger ones and offer consumers the opportunity to collect and redeem their bonus points through a variety of different merchants.

Obvious synergies

Bonus programs play an important role in mobile payment as well. In the PwC study cited above, German consumers were asked about what they value when paying via their mobiles. The top three responses were not surprising: security when paying, no hidden costs, and blocking possibilities in case they lose their smartphone. However, the desire to collect bonus points during mobile payments was only just behind.

Payment service providers can, therefore, play an important role in the future when working with merchants through two key facilities. Firstly, helping to make cashless payment methods available, and secondly, by providing a platform that allows small merchants to offer valuable digital bonus programs. This allows all partners to create immense added value through a common platform – for example through the comprehensive analysis of transaction data. However, merchants would also be able to tailor the bonus programs to their own needs and to design and tailor all the consumer touchpoints as if they were running a completely separate system.


There is no doubt that payment innovation and technological advancement mean that the customer remains king. Never before has it been so easy for consumers to switch between individual suppliers, and as a result, all merchants are exposed to the constant risk of losing loyal customers. Consequently, customer satisfaction is now the focus of many retail investments by merchants and anyone who combines mobile payment with a bonus point program for recurring customers can take advantage of the additional benefits on offer.

In order for merchants to thrive in this environment, cooperating with a payment services provider who can offer a suitable platform and is experienced in both mobile payment and bonus systems could be the best route to success.