Never get between a business and its money. The announcements about Apple's Passbook and Microsoft's Wallet make me worried new obstacles to getting paid by customers are building up. Throw in the existing Google Wallet and that makes three payment and loyalty card options that essentially no one is using yet.
What does this mean for retail shops that want to get paid? With the upcoming generation of mobile phones, more customers will begin paying via these "tap-to-pay" devices. Perhaps they won't bring cash, maybe they won't even bring plastic!
With a restaurant in the fast-paced business district, I can see tap-to-pay technology becoming attractive for both the businessman wanting a quick lunch fix and the owner wanting to move people through their meal as fast as possible.
Here are a few questions and observations:
Microsoft and Google have confirmed support for near-field communications (NFC) payments and Apple's upcoming iPhone is rumored to include the feature. With Visa and MasterCard deploying NFC card readers, hopefully that means there won't be too much confusion for how to accept payment as a merchant. But who knows what the reality will be? For example, Windows Phone 8's NFC functionality is also dependent on whether the phone carrier will support it. Why? I have no idea. Does it use the data network to send payment info? How complicated will it be for a business to sign up to accept tap-to-pay payments? Here is Google's application process. Note the "Please provide us with as much information as you can about how you work with Google" question.
If someone does a tap-to-pay, who am I, as the seller, paying the percentage of the sale to? The agreement I have with my existing credit card processing facilities is a certain percentage of the sale goes to MasterCard, Visa, or American Express. Does Google, Apple, or Microsoft charge a percentage on top of this for using their phone as the payment device? Or will it somehow be a lower percentage of the sale?
To enable the "loyalty card" and "offers" features of each platform, I will need to code to their respective APIs. For a small business, they'll be lucky to create a loyalty card for one of these platforms let alone all three. Soon we may hear staff say: "Sorry, we're not compatible with your phone."
What will this mean for existing "loyalty card" providers such as Perx and Squiryl? Do they pivot and become companies that help retailers enable loyalty cards on these new, broader platforms? Or do they hope to achieve critical mass in the local market before the Passbook and Wallet launches so that they strike a deal with one of the big three companies?
What will the disputed claims process be like? Is there a new wrinkle with tap-to-pay's different hardware, network, and software all coming into the mix? If a merchant has to call the phone company to get support for payments, that would be torture.
Will Microsoft, Apple, and Google share the data about my customer's loyalty card usage with me? Or with other shops? If Google notices that I have a customer who dines daily at my restaurant, will they start pushing ads from a competing restaurant specifically targeting my customer?
Which one do you think will become the Diner's Club of e-Wallets? You know, the one that will offer great benefits but won't be accepted anywhere.
This will be exciting; a year from now our customer checkout process might be extremely different! I just hope they're not basing this on any of those hotel keycard technologies... Tap. Fail. Sigh.