Why mobile payments still haven’t revolutionized retail

Kristjan Hiiema Erply CEO

Mobile payments are a revolution waiting to happen. It just makes sense that, with so many of us carrying around increasingly advanced smartphones, we’ll be able to use them to pay at brick-and-mortar stores and the check-out line.

We’ve been hearing predictions like this for years. Recently, Juniper Research estimated that worldwide mobile payment volume would reach an incredible $240 billion this year. By 2015, Juniper predicts, worldwide mobile and point-of-service (POS) terminal payments will reach an even more incredible $670 billion.

And yet, we’re really not seeing physical retailers move to adopt POS technology.

Yes, a few physical retailers are trying out new POS technology — Office Depot, for example, just announced it has teamed up with PayPal to experiment with letting customers pay using their phone number. But this kind of toe-dipping leaves us quite far away from widespread adoption.

Is that because the technology just isn’t available yet? No, the basic technology is no longer a barrier. NFC technology has developed significantly and Internet security is advanced enough to enable secure payments. Even paying via mobile phones using your carrier contract for collection was possible a long time ago and has been used around the world (it’s very common in Japan and has been for years), so that’s not what’s holding back mobile payments.

The slow adoption isn’t due to a lack of investment or innovation among technology vendors, either. Many companies, big and small, have been pouring a lot of money into this market, intent on becoming market leaders and making their platform the end-all-be-all standard. But no one has truly acknowledged the complexity of today’s retail point of sale process and what is required to enable reliable, and scalable mobile payments (and mobile services, for that matter, such as social applications, coupons, loyalty programs) at the retail point of sale.

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