I once had to go through a very intensive security check because I left a 1 euro piece in my pocket. The pocket had a hole. The euro coin found is way in the fabric and I was setting off all alarms. The only thing that prevented me from having to strip was a portable scanner that pinpointed the culprit. A small knife (not mine) was used and the problem was taken away.
It was like having public surgery.
This experience came to mind when I was reading the new white paper of the Atos Scientific Community that is about to be published shortly (we will let you know when). The document explores the world of mobile payments.
“Mobile payment is not about printing money or inventing a new currency, but about a customer, a merchant (or both) using a mobile device during the payment of a transaction.”
The paper describes in detail the technological challenges and looks into the way that business need to adapt themselves to accommodate the use of mobile devices for enabling payments.
Several business scenarios are explored in the paper showing the benefits of this way of handling transactions.
Normally when we introduce this concept we focus on the benefit for the customer. Mobility, no need for cash and ease of use are obvious positive points. It becomes interesting if we move our view to the merchant and look at what mobility can do at the ‘other side of the transaction’.
- Firstly a mobile point of sale introduces more flexibility in store concepts and a intimacy between sales person and buyer; this enhances the shopping experience and makes the transaction a more natural part of the shop visit.
- Secondly, the investment in the point of sale equipment is lower, any mobile device will do and there is a great choice available.
- Finally the digitalization allows for multiple payment scenarios including different levels of security (each with their own cost level), connecting loyalty schemes and ad hoc sales promotions.
Although the benefits look compelling there are still hurdles to overcome. These include the obvious security challenges as well as the physical capabilities of the devices such as encryption, local storage and Near Field Communication. Also you do not want your roaming contract or mobile data plan to become an inhibitor when you see that once in a life time opportunity at the local market in that cute little village in Peru.
“Can technology make physical money irrelevant? That may be a statement that is too bold to make today, but it is certainly not too difficult to envision. One of the main enablers for such a zero-cash scenario is mobile payment.”
Once the white paper is published we will add the download location so you can download it and discuss it with your local grocery store.
Update October 25, 2012: The whitepaper is now published and can be found here.