Mobile Payments and Retail Sector

According to a statement by Reserve Bank of Australia, amount of electronic payments is in increasing trend and the conventional methods like cash and cheques are in decreasing trend worldwide and this statement is also backed by data on global mobile payment revenue. Undoubtedly, this trend created a new field for both Retailers and Tech Giants. Yes, we are talking about mobile payment systems, because while payments become electronic, on the other hand, use of smart phones is also in upsurge!

For retailers, complete integration into different types of mobile payment systems is a matter of existence right now. If a retailer accepts a particular mobile payment system, the business it makes is more competitive compared to its competitors. According to a study in, 37% of the retailers have already implemented Apple Pay and  PayPal to their sales processes. Wait, even if we don’t offer a different product or a lower price to customers, can we become more competitive? Yes, because even your loyal customers always want to see something new and innovative, otherwise they can prefer your competitor that offers innovation.

Digital payment methods North American retailers accept or plan to accept as of December 2017 Source:

Why so much interest for innovation from customers? A paper approaches to the issue from both ICT (Information and Communication Technology) and Banking, explains the issue in threefold: firstly, domestic demand for better financial services increased in the world, this demand found a place to expand itself by high level of cooperation in international level, lastly on the tech side, ICT is the leading sector that benefited most from positive externalities of globalisation.

There are services that converts this global demand of ‘’better financial services’’ to users. Let’s take PayPal as an example. PayPal is one of the leading electronic payment system together with Apple Pay and Android Pay, and number of users of these services shows that in retail sector, enterprises from a neighbourhood shop to Walmart, need to implement these electronic payment services, in order to take a better position in competitive market.

Number of PayPal’s user accounts from 1st quarter 2010 to 2nd quarter 2018 (in millions) Source:

Apart from implementation to attract more customers, mobile payment systems can directly boost a company’s brand position and cashflow control. Which brand comes first to your mind when talking about creating its own mobile payment? I will take Starbucks’s mobile app as an example.

Although it is not our topic of discussion today, we need to give Starbucks credit for the application’s ease of use. Starbucks’s mobile app is on top of the rock when we are talking about mobile payment applications in US. According to a study by eMarketer 23.4 million people this year will use Starbucks app to make purchase. Apple Pay will be used by 22.0 million users and Google Pay will be used by 11 million users. What makes Starbucks app more interesting it is also a huge money resource, it is like a unregulated bank, according to MarketWatch report in 2016, Starbucks had 1.2 billion dollars loaded at Starbucks cards and app. Not only in coffee business, in every business rely on the mobile payments, Starbucks simply crushes its competitors. Let’s turn back to beginning of our discussion and find a takeaway point. While Starbucks generating more than a billion revenue from app, it does not produce any new product to compete, like iPhone X or Galaxy Note 9. It is just delivering a new method to its ordinary business process: selling coffee in a new way! The key takeaway for a retailer is in the form of two simple questions:

What does your competitors offer to your customers that you don’t?

What are your customers experiencing when they are intracting with you on any platform?

These questions can be answered by a solid market knowledge. In this short read, we have focused on a hot and innovative issue, it means that tracking all of the developments manually in this field can turn into a nightmare, a user friendly competitive intelligence platform can cure all of these problems.

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