NATIONAL REPORT — For years, there has been a buzz in the retail industry about the game-changing mobile payment options on the horizon. Experts touted that it wasn’t a question of if, but rather a question of when. And it is becoming clear that the answer is now.
In the United States, mobile payments are expected to triple by 2021, going from $80.7 billion in 2015 to $282.9 billion in 2021, according to a report by Forrester Research. This includes three types of mobile payments: mobile remote payment (in app), in-person payment, and person-to-person or peer-to-peer payment. Mobile in-person payment is expected to grow the fastest.
“The low adoption rate of mobile payments in the years past was majorly due to the data breaches and security concerns of consumers,” Yogiata Sharma, research analyst at Allied Market Research, told Convenience Store News. “However, with technological developments aimed at improving security, such as EMV-enabled payments and the standardization of the same by the government authorities, it has aided the growth of contactless POS [point-of-sale] terminals.”
Today’s consumers, especially millenials, are more invested in mobile technology, including wearables like the Apple Watch and connected cars, noted Bryan Russell, U.S. program manager, mobile payment and loyalty, for ExxonMobil. The oil company’s Speedpass+ app currently accepts Apple Pay and Samsung Pay as forms of payment, in addition to any major credit or debit card.
“They are migrating more to devices and are expecting to be able to do their transactions and interface with brands using these platforms,” Russell said. “Our capabilities as an industry, with the point-of-sale and cloud computing, enables us to serve those needs, and they continue to improve and enhance.”
The target customer for mobile payments is between the ages of 19 and 32, showing a high utilization of mobile wallet payments. Customers are often more willing to use mobile payments if there are incentives or a special discount tied to it, according to Sharma.
While near-field communications (NFC) and contactless payments where consumers tap their phone are still being used, there has been a shift away from that, allowing for easier entry into the mobile payment arena — many are now using mobile apps for payment processing.
At ExxonMobil, the company leverages both Apple Pay and Samsung Pay through its Speedpass+ app. When someone downloads the app, it automatically recognizes if the person has either of those payment options already on their phone and lets them know they can start using it via Speedpass+, Russell explained.
“We make it streamlined so customers can use payment cards and wallets they already have, giving them a more enriched experience through the app because it integrates our loyalty program, manages receipts, and much more — all from one mobile payment app,” he noted.
Shell Oil Co. is another industry player offering mobile payment options to its customers via an app. The company signed a multi-year agreement with JPMorgan Chase & Co. to accept Chase Pay at its stations across the U.S. At participating locations, customers can pay using their mobile phones either though the Shell app or the Chase Pay app.
“Chase Pay will help Shell transform our customer experience by tying the Fuel Rewards program to Chase Pay, giving millions of our shared customers a seamless, rewarding experience both at the pump and in our stores,” said Dan Little, head of North America marketing for Shell, based in Houston.
Phillips 66 is also partnering with Chase Pay to launch its new mobile commerce platform for the Phillips 66, Conoco and 76 fuel brands, driven by P97 Networks’ PetroZone solution. Using a mobile app, customers can locate stations, pay via the mobile payment wallet, and the company can deliver contextual commerce digital offers.
At a recent company event in Las Vegas, Phillips 66 previewed future mobile integrations with Synchrony Financial; a new branded mobile debit product; a loyalty program with Kickback Rewards Systems; and in-vehicle payment with Honda Developer Studio to allow consumers to purchase fuel from the infotainment unit of their car.
“There is still work to do before we see a big uptake of the connected car payment, but it will be game-changing and very transformational,” P97 Networks’ Frieden said. “By the end of the calendar year, we will see several automobile manufacturers that will be able to do some sort of mobile payment.”
Since the rollout of mobile payment, ExxonMobil has seen mobile transactions increase seven-fold from one year prior, and the average customer who uses the Speedpass+ app is purchasing two times more than those using a third-party credit card.
“Also, when integrated with the Plenti loyalty program, we are seeing the purchases increase two and a half times more than our average customer,” Russell touted.
For more on mobile payments, look in the September issue of Convenience Store News.