Mobile payments hit UK high streets, challenges retailers face with mobile wallets

Orange and Barclaycard have launched ‘Quick Tap’, the UK’s first contactless mobile payment service which allows consumers to make purchases on the high street using their mobile phone.

The landmark launch means that from today, in addition to using contactless cards or chip and PIN, consumers can simply tap their mobile phone on a contactless reader at tills in over 50,000 stores – including shops and cafes such as Pret A Manger, EAT and Subway – to make purchases £15 and under.

There is no doubt that mobile has started to seriously affect consumer shopping behaviour everywhere – and this announcement shows that the recent debate around contactless payments is finally coming to fruition.

The good news is that there is certainly early demand for ‘mobile wallet’ services, as recent research found that a quarter of consumers would like to use their phones as opposed to cards or cash in-store, with cost saving and convenience cited as the biggest drivers for the technology.

However, before we can see widespread adoption, it is crucial that retailers use this as an opportunity to encourage customers to embrace new gadgets on the market before their competitors grab those influential early adopters.

Education is also urgently needed, as we found that security was a key factor in consumer reluctance towards ‘wave and pay’ technologies – when in actual fact, NFC can provide significant security advantages over other forms of payment.

From a technology standpoint, it is also important for retailers to ensure that their investment in mobile strategies caters to developments such as Quick Tap. Retailers must support the devices their customers have which will only add to the current chaos in the already fragmented mobile market.

For a start, retailers will need to ensure that they have an application across many different platforms including iPhone, Android, Symbian and so on to ensure that they can support the different NFC transaction systems that are inevitably going to start cropping up.

With only 16 percent of retailers having a full mobile commerce strategy in place, the majority of retailers unfortunately need to rethink their strategies fast – particularly as those retailers that have developed a future-looking, comprehensive mobile strategy, will almost certainly be forerunners now that the mobile payments ball has actually started rolling.

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David Eads leads Product Marketing for Kony, the mobile commerce platform vendor. David is a mobile commerce veteran and was the founder of consulting firm Mobile Strategy Partners in 2009. As a blogger and frequent industry speaker, David has been interviewed about mobile for national media outlets like Mobile Commerce Daily, Marketplace on NPR, Inc Magazine, The Toronto Star, and The Christian Science Monitor. Additionally, David also has a decade of technical experience developing enterprise software systems in Java and other languages for UNIX, Windows, and other systems.