Amazon, McDonald's Turn Up the Digital Heat on Retail

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The Amazon Go store launching in Seattle, that enables customers to walk in with their Amazon app and walk out with goods without a single interaction with staff or checkouts, really goes to show that no vertical is safe from tech disruption.

App commerce is at its most useful when dealing with small transactions that happen often. This is why fast food is an obvious area for improvement; people want food, fast, and in-app order-and-pay negates queueing and over-the-counter payment time.

Amazon has been a commerce trailblazer for the last 20 years so this move will likely lead savvier business owners to take heed and make the necessary investment in app commerce to take their stores into the future.

But Amazon is just one source of digital pressure. Payment volumes will substantially shift to mobile, owing to a combination of retailer investment and consumer demand. This includes large chains like McDonald's, which has made a commitment to mobile order-and-pay in key markets in the next year.

In the same vein, grocery chains will also push hard to win over customers as the buying channel shifts to mobile. I fully expect to see a customer retention/attraction war in both the U.K. and U.S., focused on mobile and specifically non-perishables.

Additionally, the advancements in mobile payments in retail and hospitality will inevitably lead to a decline in the sales of Chip & PIN terminals, shepherding in "peak card machine." Growing use of 3DS 2.0 will also have an impact, with its wider support for app-based purchases on mobile and industry leading security features.

Although this will have very slow adoption in the U.S, in the European Union it will form the basis of the battle for the card networks to retain ownership over authentication following the revised Payments Service Directive (PSD2).

Though there is much talk about chatbots, they will most likely be involved in a tiny fraction of payment volumes and, similar to other conversation starters like bitcoin, be deemed to be a solution looking for a problem.

The next year will also see a consolidation of payments players as large incumbents look to shore up their product offering, by hoovering up the fintech startups that have been making waves over the last few years as the in-app payments revolution accelerates.

It's going to be a big — and fascinating — year for mobile payments.

Dennis Jones is CEO of Judo Payments. He has also served as a manager and advisor to Bain & Co. and an advisory board member for Travel Keys.

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