Mobile payments

Mobile payments are a technological development that retail bakeries must be ready to embrace. An expert panel at a May 19, 2014 session on mobile payments at the NRA show agreed that mobile payments are poised to become the norm rather than the exception on the US dining scene. Interestingly, Americans are further behind in their use of such technology than consumers in many other places around the world. But that is changing very quickly.

“We are heading toward mass adoption phase of mobile payments,” says Brett Shulman, CEO of Cava Mezze Grill, which operates five modern Mediterranean restaurants in the Washington, D.C., area.

Laura Jakobsen, senior vice president of marketing and design for Pinkberry, which operates 250 frozen yogurt shops in 19 countries, agreed that US consumers are transitioning to mobile payments swiftly because “they have already embraced technology in all parts of their lives. They have high expectations for simplicity and speed.”

Like other savvy retailers are doing, Pinkberry created an app that allows customers to load their mobile payment card into the Pinkcard app so customers can receive loyalty points automatically. Customers simply swipe the app to pay for frozen yogurt at any store, and the transaction is done and their loyalty points are stored. Customers receive a free yogurt with every 10th purchase, among other benefits.

“We created the app because we wanted to store loyalty data,” Jakobsen says. “This is a journey for us as much as our customers.”

Caleb Mitsvotai, senior manager of innovation and technology strategy for Panda Restaurant Group, which operates 1,650 Panda Express restaurants in the US, Guam, Puerto Rico, Canada and Mexico, points out that the key advantage of mobile payment (also known as mobile wallets) is to know more about your customers. And the technology is for everyone, large or small.

“Even if you are a mom-and-pop operation, you are not isolated from this technology,” he says. “The war that is currently going on is not about payment, it’s all about the data. The gross revenue for mobile wallets is two to three times greater than the gross revenue of card-based accounts.”

The reason? The purchasing information about today’s customers is worth a lot to your business, as well as many others.

What is a mobile payment?

Mobile payment, also referred to as mobile wallet, generally refers to payment services operated under financial regulation and performed via a mobile device. Instead of paying with cash, check or credit cards, a consumer can use a mobile phone to pay for a wide range of products and services and digital goods.

According to industry sources, there are five basic types of mobile payment technology.

NFC (Near Field Communication)
QR Code Scan
QR Code Presentment
SUN (Single Use Number)
Beacon Technology

Mobile wallets are popular among online companies like PayPal, Amazon Payments, and Google Wallet. Users register, input their phone number, and the provider sends them an SMS with a PIN. Users enter the received PIN, authenticating the number, and then input their credit card information or another payment method if necessary, and validate payment.

QR (Quick Response) codes are an easy way to inject information into a mobile phone. This makes it easy to create communication such as visiting a website or making mobile payments. Originally used to track products in warehouses, QR codes were designed to replace traditional one-dimensional bar codes. Traditional bar codes just represent numbers, which can be looked up in a database and translated into something meaningful. QR codes were designed to contain the meaningful information right in the bar code.

Near Field Communication (NFC) is used mostly in paying for purchases made in physical stores or transportation services. Consumers using a special mobile phone equipped with a smartcard waves their phone near a reader module. Most transactions do not require authentication, but some require authentication using PIN, before transaction is completed. The payment could be deducted from a pre-paid account or charged to a mobile or bank account directly.

A Single Use Number (SUN) is a code that consumers can use instead of a password when they sign into their account. Each code can be used only one time, but consumers can request one whenever they need it. If they are signing in on a public computer—like at the library or school—using a single-use code helps keep their account information secure.

Beacons are a low-cost piece of hardware (small enough to attach to a wall or countertop) that use battery-friendly, low-energy Bluetooth connections to transmit messages or prompts directly to a smartphone or tablet.