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By Mark Williams, Best Buy
In August, we at Best Buy announced that we were joining a cadre of other major retailers in an effort to build a mobile-commerce solution that can improve shopping and paying for customers and merchants alike.
We were not surprised that this news generated a lot of attention. After all, how often does one see the likes of Target, Walmart, CVS, Lowes and us collaborating? And, of course, the news means that merchants have entered a fray that already includes significant entries from issuers, mobile carriers and a few big digital players.
What did surprise us, however, is the amount of skepticism regarding the need for mobile payments. “Isn’t this,” to paraphrase a common refrain, “a solution without a problem?”
We could not disagree more strongly with that sentiment.
It is our belief that the coming shift to mobile payments has the potential to make shopping more convenient and efficient for our customers, provides a once-in-a-generation opportunity to bring merchants and their customers closer together in mutually beneficial ways, and will dramatically improve the status quo in payment security.
The fact is, smartphone-owning consumers simply do not leave home without their phones. The ability to carry a phone in lieu of a wallet will simplify their lives. As will faster-moving checkout lines and electronic coupons, Reward Zone certificates and receipts.
There are those who think the status quo is convenient enough, just as there were those who saw no issue with fishing for change at highway toll plazas or who thought automobiles were pointless because horses got them from Point A to Point B without incident. History shows that when technology can save us time, it emerges.
But there’s more at stake here than just speed. Mobile commerce offers an unprecedented opportunity to engage in one-to-one marketing on a broad scale. For merchants, the ability to better serve our customers by knowing better what they expect us to know, what they bought from us, when they bought it and what for. To be able to tailor offers to them that can be delivered and redeemed in real time on their phone is something that’s been coveted for years. And consumers have waited just as long for the prospect of consistently relevant offers from the places they regularly shop. Mobile commerce brings all of that closer to fruition.
Mobile commerce also lets the shopping experience begin well before the consumer ever sets foot in the store, and it also enrichens that experience with product information, ratings and reviews. And – here’s the best part — all of this can be achieved while making payments more secure than they are today. Yes, there have been some early problems, including a significant one involving Google Wallet. But the status quo is not some sort of security utopia. Take a look at what you are spending on fraud losses now.
The fact is, mobile-payments can incorporate PINs and other technology (EMV) that will make payments far more secure than they are today, when we are relying on 1950s technology to protect our financial data, and are so accustomed to paying constantly for its imperfections that we forget how poor the current system is. European consumers payments are much better protected via EMV, Chip and PIN then U.S. consumers with current systems, but why should that continue in the next world of mobile payments.
Mobile commerce has the potential to improve security, improve our relationship with our customers and improve the convenience factor of shopping in our stores.
That’s why Best Buy is going mobile.
How about you?
Mark Williams is president of financial services at Best Buy, an owner of Merchant Customer Exchange.