How Mobile Payments Will Transform The Shopping Experience

Guest author Michael Della Penna is Senior Vice President of Emerging Channels at Responsys, Inc.

We've heard it before' this is going to be the year that mobile payments will boom! Both Gartner and Forrester have made strong predictions of mobile growth, with Forrester recently saying that the U.S. mobile payments market will hit $90 billion by 2017, a 48% compound annual growth rate from the $12.8 billion spent in 2012.

But how do we know that 2013 is really the year that 'mobile wallets' will finally take off? And what will things look like when mobile payments actually fulfill their promise?

4 Key Indicators Of Mobile Payment Success

Here are four indicators from players across the ecosystem that suggest we will see a global shift in mobile payments this year:

1. A survey of 200 mobile industry executives, developers and insiders conducted by Chetan Sharma Consulting voted mobile payments the top mobile applications and services category for 2013. The survey said mobile payments and commerce will get big in 2013, with Visa, the banks and more established online payment companies like PayPal well positioned to cause disruption in the mobile payments space.
2. Visa Europe claims that in 2013, there will be 40 issuers offering mobile contactless payment services to consumers, and by the end of 2013 around 80 types of smartphones will be certified to carry out contactless payments.
3. A study performed by Shop.org and Forrester research, called the "State of Retailing" found that mobile payments will be essential if retailers wish to remain competitive. 51% of the participating retailers said that their top priority in 2013 had to do with optimization, including mobile payments.
4. China is set to follow U.S. and Asia-Pacific countries to embrace a cashless society as it taps a boom in e-commerce and electronic payments, with mobile payments likely to soar 52.7% annually in 2013. Mobile payments are likely to expand to $17 billion in 2013.

How Will Mobile Payments Work?

So what do all the figures actually mean?

If things continue as predicted, people the world over could very soon end up walking out of the house without their cards and cash. Instead, they'll use their mobile phone to purchase everything from electronics to furniture, from groceries to gas. Sounds pretty cool right?

What's even more fascinating is how the growing use of mobile and the increased popularity of apps, passbook and mobile payments are combining to create a comprehensive mobile experience that is changing the way consumers interact with brands.

Consider this scenario for early 2014:

• As you walk past your favorite electronics retailer, you get a notification offer pushed into your app offering you 10% off an LCD TV purchase.
• Intrigued, you enter the store, use your phone to do some price comparisons, see a few LCD ads and select the perfect new LCD TV for the Super Bowl.
• After learning your model is out of stock, the salesperson informs you it can be shipped from the warehouse in time for the game, so you order it.
• At the checkout counter you use your phone to access your offer code and loyalty number as well as to pay with your phone. The salesperson asks if you would like to receive product and shipping text alerts and you promptly opt-in.
• You leave the store and quickly confirm your subscription and a short time later receive a text message confirming the purchase and informing you that your order has been received at the warehouse.
• The next day you get an alert informing you your TV has been shipped and a final message informing you the TV has been sent out for delivery.
• Upon delivery you receive your final alert confirming delivery, thanking you for the purchase and a final prompt to text back 'SERVICE' should you have any questions for customer service.

What Will It Take?

While all these technologies are available today ' SMS, targeted mobile advertising, push notification, passbook and mobile payments - they are rarely coordinated. The whole process never happens as smoothly as laid out in the scenario above. The industry still has a long way to go to create a seamless mobile experience for our customers.

Doing so will require combining data and systems that talk to each other. It will also require coordination and orchestration both within a single channel (i.e. Mobile) as well as across multiple channels (email, SMS, Push, Passbook, mobile ads) to create a positive experience for the recipient and a sale for the retailer.

It will also require real-time, automated management ' so users are contacted only when they're in the market. Nothing would be worse or more inefficient than to have that same individual receive an offer promoting LCD TVs right after they've just bought a new TV.

The good news - again - is that the basic capabilities are here today and that brands and their partners are already developing the strategic know-how to build, manage and orchestrate mobile and multi-channel relationship marketing efforts around mobile payments. There are big rewards waiting for the first companies able to put it all together for their customers.