In many stores, cash registers already have gone the way of the rotary dial phone. Is cash itself the next thing to go?
One merchant we know had a customer pay for a very large purchase in cash. Literally. Stacks and stacks of $100 dollar bills!
It was such an unusual occurrence (and such a substantial amount of cash), he actually posted pictures of the cash on his Facebook page! (And then nervously walked the deposit to the bank.)
The Mobile Payment revolution is just beginning
Keeping up with accepting cash, checks, credit cards and debit cards is just part of doing business as a retailer.
And now, the
ever-expanding capabilities of technology, plus shoppers'
growing comfort level and confidence with online payments and
virtual payments, has opened up the floodgates of new ways to pay that
do not involve a traditional account from a financial institution.
For example, some retailers accept "payments" when the customer provides their phone number and PIN. The retailer receives "payment" without seeing a bank account or credit card account number.
Instead, that "linkage" has occurred between the customer and their payment processor...which is not necessarily a financial institution!
With this new technology comes a new wave of companies eager - and able - to be the
new payment processors.
The social media platforms, retailers, technology firms, telecom companies and others - Amazon to Apple, Google, Facebook, Square - are leveraging their customer base, their Big Data, and their rapid-fire pace of innovation.
- For example, last week it was announced that Intuit and Square have teamed up to allow merchants to quickly link their transactions via Square to their QuickBooks accounting.
- And, PayPal (eBay subsidiary) acquired a mobile payments startup - Braintree - for $800 Million, as they try to catch up in the mobile payments world.
Meanwhile, some retailers scoff at the notion that customers will pay via their smartphone or some kind of electronic wallet.
- They cite studies such as this: 63% of Americans use their phones for only two things: talking(!) and texting.
- Most customers, these retailers reassure themselves, will need a lot of education and preparation for the "mobile payment" revolution.
Actually, that education has begun! Customers learn by doing. They're getting their practice at places with high volumes of small transactions (think Starbucks). Then, when they are trying to pay for higher value purchases (think your stores!), they expect the same level of technology sophistication.
Postponing these changes and adjustments in stores is not the answer. Retailers have no choice; they must be accepting of these technology "advances", in order to keep pace with their customers' expectations.
The harsh lesson, once again: Even if it is an arm's race that just keeps escalating, you must keep up with the flow of technology...or get run over!
