Although the Washington Post recently described mobile ordering for fast food as the “new drive-through,” the uptake of both mobile ordering and mobile payments in all sectors has been much slower than expected by analysts.
Perhaps the problem is the piecemeal approach of the mobile software industry, which has broken up the various functions of ordering, paying for, and gaining products into separate sets of offerings, each with its advocates and vendors.
Admittedly, most consumers are waiting for an integrated process that is both easy and transparent regarding what is happening in the buying process.
Although much of shopping operations is hidden from consumers as they buy in stores, it is a relatively complicated and involved process ranging from initial product design, manufacturing, logistics, warehousing, distribution, shelf stocking, advertising, signage, provision of information, a collection of data, and point-of-sale processes and technologies.
So, when innovative developers invent a new app for mobile payments, for example, people don’t use it if it adds more complexity to their lives because it is not well-integrated with the rest of commercial processes.
And, because it involves their money, many consumers worry about the security of mobile apps that ask them for payment.
Many experts expect that by 2020, most of us will use mobile phones for ordering and payments regularly, killing both cash and credit cards.
But, we have to get there first, as we are still in the early adopter stage of this emerging technology.
Already at least a third of us have smartphones, and by 2020, most mobile phones will have the same capabilities as our most advanced smartphones today.
What is interesting is that, as predicted by Clayton Christiansen’s theory of disruptive change, the big banks are not the leaders in this developing technology. As a trio of McKinsey analysts recently wrote:
Unfortunately for banks, many of these payments are transacted through mobile apps controlled by online-payments specialists and digital merchants. Payments represent the beachhead for the entire banking relationship, and this beachhead is under attack. Offering a strong payments plan as part of a comprehensive strategy for digital banking is therefore an imperative for banks. But to compete in this emerging arena, banks must meet the expectations of digital natives, delivering diverse tools to help customers make smart decisions across a range of financial services. They should begin by capturing their customers’ most frequent transactions with the new mobile channel and then proceed toward a fully digital relationship.
Like many incumbents in business, banks might not see the perceived threat until it is too late. But ePayment services like Square, PayPal, ROAM, and now Amazon are already carving up market share. The banks and major credit cards have been slow out of the gate for offering mobile payments, and we will see if they can catch up.
What is needed is a complete rethink of financial transactions using mobile devices.
Michelle Evans argues that “the future of mobile payments will be directly related to the value-add that consumers get.”
In order to move consumers to a new mode of behavior, they have to see something in it for them, besides being a better buying experience.
At Float, we specialize in planning and providing integrated mobile solutions for a variety of enterprise-level clients. If we can be of help, please contact us.
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