From cash to card to digital and beyond, the power of converging technologies in the payment space is transforming how people transact. While cash is still the most widely used payment mode around the globe, it is fast becoming outdated, and as one of the first countries to move away from cash with EFTPOS in 1985, New Zealand is well positioned to embrace the newest evolution in payment methods.
So how is technology converging and what are the implications of this for consumers and businesses?
By now, most people are aware of ‘tap and go’ or ‘near-field communications’ (NFC) technology, and the success that the industry has had with it. Being able to simply tap your credit card on a terminal and make purchases more swiftly and efficiently, is now a standard feature of the payments landscape. This however, is merely the latest evolution of digital convergence when it comes to payments – and the next progression is just around the corner.
Making payments with your mobile phone has long been touted as the next big thing and New Zealand is unique in that it is the first example worldwide, where all of the main players from across the banking and telecommunications industries have come together in order to build a shared mobile wallet solution that will be able to be accessed by all, through the formation of a trusted service provider (TSM).
For New Zealanders, this means that irrespective of what major bank or mobile phone company they subscribe to, they will be able to utilise mobile wallet technology in the very near future as the industry moves beyond the trial phase to a more mainstream roll-out in 2014. As an industry, the foundations for this technology have been laid for the past several years with several thousand active terminals already in place. This means that when mobile wallet technologies are rolled out in the near future, New Zealand consumers will be able to be amongst the first in the world to take advantage of the benefits of digital wallet technology.
In terms of the benefits, these have the potential to be far reaching from both a business and consumer perspective. The platform will support customer-specific offers, loyalty incentives, and bill-pay options. These platforms are also intended to support services beyond payments such as loyalty cards or transport cards – to be replaced by applications securely stored in a virtual wallet on a mobile phone. They will also allow retailers to create new and exciting customer shopping experiences across their channels.
To achieve this however, education will be key. As with anything in payments, security and trust is critical and it will be vital that everyone understands how the technology works and how it will benefit them.
To deliver on this promise, businesses must do their part by understanding the opportunities that converging technologies can offer in the payment space. Then once adopted, staff will need to be trained to ensure that they, as the face of business, can enhance the customer experience, helping to grow acceptance and drive adoption, increasing the value of converging technologies to your business.
Almost 30 years ago, New Zealand led the world in moving from cash to an electronic payment system. With digital convergence technology rapidly changing the payment landscape once again, now is the time for retailers to start preparing for the next evolution in payments.
Next week's article will delve further into the opportunities omni-channel retailing provides – and explore how social media, customer reviews and feedback, and increasingly personalised shopper profiling can be incorporated to enhance the shopper experience.
Matthew Barr is head of market development, Australasia for MasterCard Worldwide. Based in Sydney, he is responsible for the development of emerging payment services, including both mobile and e-commerce payments, in the Australasian markets.