Payment-terminal software applications are poised to play a significant role in the Near Field Communication payment ecosystem.
Terminal makers also are set to roll out devices that support NFC payments, but the software within them will help to enhance the relationships merchants have with consumers, especially through their in-store loyalty programs, observers say.
“The big change for terminals is that they will need software that requires more than just the ability to pay,” Todd Ablowitz, president of Centennial, Colo.-based Double Diamond Group LLC, tells PaymentsSource.
Ablowitz expects terminals to feature software that will improve such areas as discounts, coupons and loyalty-point systems. “All of those things are going to be part of the consumer experience, and that is what is going to be the sizzle in any NFC rollout,” he adds.
Indeed, instant discounts via coupons or loyalty points are high on the list of must-have terminal software as it relates to the NFC ecosystem, insiders say.
William Rossiter, vice president of marketing at terminal maker Hypercom Corp., describes a scenario where a consumer would go online with a smartphone, find a coupon and digitally “clip it,” and proceed to the merchant to redeem the value at the point of sale.
NFC changes the coupon experience, but it also brings consumers into the brick-and-mortar environment and opens them to additional impulse buys, Rossiter says. “To me, NFC solves the problem of bringing more customers into stores,” he adds.
Some mobile applications already available address this problem. Shopkick Inc., for example, has a smartphone application that also functions as a mobile wallet. Moreover, merchants may offer consumers “kickbucks” just for stepping inside the store or for clicking on the store’s entry in the mobile application to see coupons. Consumers may redeem their points for gift cards at participating Shopkick stores such as Target Corp. and Macy’s Inc.
Rossiter contends such initiatives could reach a new level because NFC would enable the phone to communicate with a similar application residing inside a terminal.
“Payment is probably the least sexy capability of a mobile phone,” he says. “It’s these exciting applications the mobile phone delivers. Nobody wakes up in the morning thinking about paying for something.”
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