If you’ve been to a Starbucks lately you probably witnessed a major tipping point in retail technology without even knowing it.
Maybe you’re already one of those people who pull out a smartphone to pay for their latte. If not, perhaps you’ve sensed one of them fuming impatiently behind you as you fumbled with your wallet to pay the old fashioned way.
Either way, it’s all part of a mobile payments trend gaining traction in Canadian retail. According to a new study from PayPal:
- About one third (29%) of Canadians have used their mobile phone to make an online purchase on-the-go
- Almost one quarter (23%) have used their phones to make purchases inside a bricks-and-mortar store
So more Canadians are embracing the mobile way to pay. Based on another finding from the survey, you might soon see more of your fellow coffee lovers raising their wrists (as well as their phones and coffee cups):
- 23% of Canadians would be likely to pay for in-store purchases using a wearable device such as a watch or bracelet
Since Samsung’s Gear watches now accept mobile payments via PayPal (and the new Apple Watch will soon do the same via Apple Pay), wearable payments could be on the verge of wider adoption. Salesforce.com’s wearable app developer program could add further fuel to the trend.
In light of all this, a recent white paper released by British firm 4imprint seems that much more timely. The report does a pretty good job of listing various ways that wearable technology will impact businesses overall. Based on the study, here’s my takeaway on how wearable payments might affect retail networks – and what retailers can do to prepare.
- Bigger data: Wearables allow companies to access “on-the-fly sales data,” the study notes. They also allow retailers to collect data on the fly from customers. But retailers must analyze that data strategically in order to extract its value.
- Bandwidth: Wearable payments will add to network loads. “Look at the existing network and reevaluate its capabilities to make sure it can handle the increases in traffic and access,” the report advises.
- Legality: Keep an eye on evolving laws around privacy and financial data collection. “Some (governments) are already lobbying for greater controls and regulations surrounding use of wearables,” the authors point out.
- Security: It’s still the top concern about mobile payments among many consumers. In the PayPal survey, 47 per cent of Canadians “wish retailers offered more safe and secure mobile payment options.” The 4imprint white paper concurs. Warning that wearables will make BYOD “seem like a cakewalk,” it suggests that businesses “upgrade security and impose tighter controls.”
- Costs: “You might need to hire more people to manage and monitor wearable access long term,” the 4imprint study advises. “(And) what about the costs of upgrading networks or using more technology to protect corporate data?”
- Be “ready-to-wear”: “Companies will need to modify how they think and design (products and services) to accommodate wearable technologies,” the white paper concludes. Similarly, retailers must consider how wearable functionality will affect every aspect of their payment systems: security, app design, integration with existing payment and accounting processes, customer marketing and employee training.
By bearing these facts in mind, retailers stand a better chance of making wearable payments a comfortable fit for their business.
Image via MobileCommerceDaily.