CHICAGO — If the retail giants'
Rather than focus on a single common platform for mobile payments, each retailer has turned its attention inward, building up platforms to improve the consumer experience and make the most of the data offered through any digital payment system.
In that manner, retailers feel they are actually leading the charge on mobile wallet innovation — even if no single store has the reach and brand recognition of Apple Pay or Google Pay.
"No one was really solving problems for the retailers," said Laura Townsend, senior vice president of operations for the Merchant Advisory Group. "For example, use of contactless payments has not been solved for drive-thru windows at quick-service restaurants."
The focus for any new payment method has to be on the consumers using it, and those consumers are generally customers for the retailers.
"It has to have an impact on customer experience," Townsend said Monday at the annual Mobile Payments Conference. "That is why retailers are doing their own thing."
In the wake of MCX's failure, the lessons learned have manifested themselves in the form of platforms such as
The benefit of these platforms is that they were developed by companies working directly with retailers to address specific needs and improve customer service and satisfaction, said Alan Paul, founding member and head of business development at CardFree, which worked on the initial Starbucks offering.
"Apple Pay and Google Pay were not really focusing on the retail space," Paul said. "They were doing OK in solving web payments, but in terms of working with retailers, it is still a huge battle over who owns the customer data."
Retailers are taking a cue from ride-sharing services in that they can still address their specific needs and have relationships with card networks, especially if those networks want their card to be the one on file in the customer database and certainly top of wallet.
Though it is being done, it is not as easy to work closely with wallet providers that still, for the most part, operate with the major disadvantage of working only on their own operating systems. In addition, some work only with Near Field Communication and some only with QR codes. Not all merchants have both; some have only one or the other, and some have neither.
"It is tough to do relationships with the wallet providers, because it's a question of who has the data," said Brinn Sanders, director of business development for Lyft. "Plus, we don't want our payments screen to look like a who's who" by offering numerous options.
Wallet providers and merchants need to find a way to build a more cohesive relationship, Sanders added.
As it is, merchants will continue to develop their branded mobile payment options, even though they can be hamstrung by the Honor All Cards rules that apply to payment acceptance, Townsend said.
"We have to accept Apple Pay wallet, and it's an example of another method inserted into the retailers' environment that doesn't get the retailer point of view," Townsend added. "That approach and those tactics need to change."
It will be easier for retailers to compete against Apple Card and other similar products that may follow it from the major tech companies — if they begin to embrace the next phase of commerce.
That phase is "conversational commerce," in which the combination of human customer service and artificial intelligence provides voice and digital experiences in messaging, payments and mobile wallet storage, said Will Graylin, founder, CEO and chairman of OV Loop.
Graylin's LoopPay product was acquired by Samsung four years ago to power Samsung Pay's Magnetic Secure Transmission feature, which allows the mobile wallet to be used at terminals that support magstripe payments but not NFC.
The new OV Loop operates independently of Samsung as it seeks to help retailers compete against advancing technologies from companies that may not stress customer experience to its fullest.
It works on both Android and iOS operating systems, and would be distributed through sales channels, and from financial institutions.
"Relationships with the customer are making a difference," Graylin said. "It happens through better conversation, and through better payment solutions and experiences."
Apple is already trying to make the customer experience "super simple" with the new Apple Card, Graylin added. "Retailers need to do something that is even better."
