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NASHVILLE, Tenn. — Should convenience store retailers offer mobile payment?
It’s an individual business decision, but there are many advantages to doing so, Tim Patterson, general manager for card services at Alon Brands Inc., said Tuesday during an educational session at the 2014 annual meeting of SIGMA: America's Leading Fuel Marketers.
The top reason for c-store retailers to consider offering mobile payment is the opportunity to complete a transaction with a lower interchange fee, the Alon executive noted in his session titled "Mobile Payments: Whose Hands Are in Your Wallet?"
Not far behind is better transaction security, said Patterson. Mobile payment transactions primarily take place in the cloud, making it more difficult for hackers to steal customer information.
“The [current] magnetic stripe card is a bad system,” he said. “It exposes way too much data.”
Mobile payment reduces the chance for fraud via tokenization, Patterson explained. Tokenization is the process of substituting customer account numbers with a token, or another number attached to that customer. The merchant only sees the token and if a breach occurs, a new token can be assigned to a customer account without important information being stolen.
The opportunity to combine payment with loyalty, while providing a better experience that customers find “cool,” are additional reasons c-store retailers should consider offering mobile payment, the Alon executive stated.
Although Patterson described many ways retailers can benefit from mobile payment, he acknowledged that convincing customers to use the technology will still be difficult for those accustomed to simply swiping a credit card or debit card.
“Consumers don’t care about fraud because they don’t have to pay for it,” he said. “They constantly see advertisements saying they are not responsible if fraud occurs. But what they don’t know is the local retailer will be responsible.”
Whether operators decide to accept mobile payment or not, the technology is sure to change the retail marketplace, concluded Patterson.
“We get an opportunity to change the payment environment,” he said. “… We have a blank slate to implement an excellent system.”
Dallas-based Alon Brands Inc. is the largest 7-Eleven licensee and operates more than 300 convenience stores in Texas and New Mexico.
The 2014 SIGMA Annual Meeting continues through Wednesday at the Omni Nashville hotel.