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Beacons’ mobile payments potential cracks open to retailersBy
Marble Slab Creamery and Moe’s Southwest Grill will be among retailers who soon will offer mobile payments enabled by Bluetooth Low Energy beacons.
As part of iMobile3’s update of its PassMarket platform, participating retailers will be able to add gift card purchases and mobile payment passes to their existing loyalty and rewards programs. Mobile payments are slowly gaining ground and retailers are looking to replicate successful mobile payment programs, such as the popular Starbucks’ one.
“The question of whether there is a demand for mobile wallets depends on the definition of ‘wallet,'” said Ben Jackson, senior analyst at Mercator Advisory Group, Maynard, MA. “Starbucks has shown that people will use mobile payments, since 11 percent of all its United States’ transactions in the fourth quarter of its fiscal 2013 were conducted via mobile payments.
“Other companies, such as Dunkin’ Donuts are building their own mobile apps — or wallets — that are starting to see traction,” he said. “Right now, there needs to be a compelling reason for the shopper to switch to a mobile payment.”
Burrito chain Moe’s Southwest Grill and Global Franchise Group, owners of ice cream franchise Marble Slab Creamery did not respond to press enquiries.
IMobile3 updated its PassMarket platform and renamed it PassMarket Beacon Edition. PassMarket Beacon Edition will enable retailers who use either the PassMarket platform or PassMarket iOS or Android applications to offer gift cards and mobile payments.
Both PassMarket platform and applications are intended to simplify the loyalty, rewards, gift cards and payments processes for both retailers and consumers.
Consumers will create a profile with their basic contact information, and that information will be used to create a virtual pass.
The digital pass can be stored in a mobile wallet, such as Apple’s Passbook, Google Wallet or Samsung Wallet. Apple Passbook, Google Wallet, PayPal Wallet, PassMarket Wallet
For security, consumers’ credit card information will neither be stored in the phone nor by the retailer. Instead, a payment processor will store that information in a secure vault.
Target and Neiman Marcus security breaches occurred because the retailers’ stored decrypted credit card data in their own systems.
Consumers who join participating retailers’ loyalty program will install a virtual pass in their mobile wallet.
The pass will be beacon-enabled, similar to Apple’s iBeacon micro-location technology.
Beacons use short-range, low-energy Bluetooth transmitters to send alerts to mobile devices within 100 feet of them.
The beacons are used to trigger contextually relevant messages to consumers who are in or nearby participating stores.
The beacons may tell consumers to redeem coupons, earn points or pick-up items on their shopping lists.
When a consumer walks into a participating retailer, the store’s beacon will communicate with the consumer’s phone and tell him or her about specials, discounts or coupons.
If a consumer decides to make a purchase, another beacon in the store’s cash register will communicate with the pass in the consumer’s mobile wallet.
The technology will alert the cashier, who will have the consumer input his or her PIN to complete the transaction and approve the one-time credit card charge.
Loyalty and rewards will be the keys to unlock the mobile wallet’s success.
“Convenience is not enough, because it is not that hard to take out a card or cash,” Mr. Jackson said. “Starbucks’ success is due in part to its loyalty program. Acceptance of mobile payments at merchants also needs to increase for demand to increase.”
Retailers seek mobile wallets that can be used by both iOS and Android device owners.
About 52 percent of smartphone users subscribed to an Android platform as of last November, compared to about 41 percent iOS subscribers, according to comScore.
In 2013, Parks Associates found that about 20 percent of U.S. smartphone users also used mobile wallets, and that number was expected to increase to 43 percent of smartphone users by 2017 (see story).
Consumers are seeking to replace their furnishings wallet with a mobile wallet, according to Bob Leonard, CEO of iMobile3, Jacksonville, FL.
“Mobile phones are the greatest convergence device of all times,” Mr. Leonard said. “Think of what they’ve already converged on the phone – a camera, a flashlight.”
Beacon technology has been gaining in popularity. Earlier this month, 150 Safeway and Giant Eagle grocery stores began using iBeacons (see story).
Since making the announcement Monday at the NRF 103rd Annual Convention & Expo, Mr. Leonard said many have sought him out at his booth, which he shares with Ingenico.
“This is a very exciting time to be in this space,” Mr. Leonard said.
Kari Jensen is staff writer on Mobile Commerce Daily
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