A mobile payment strategy encompasses more than just a plan to make your online checkout process mobile-friendly. Your mobile payment strategy needs to include a plan for allowing customers to pay with a mobile device in your brick-and-mortar store. Customers want and expect this level of convenience.
To address this need, several years ago, a universal mobile wallet was launched as an option for customers to pay for their purchases in various stores using a smartphone. The goal was to eliminate the clutter of plastic cards in a wallet. However, this smartphone-based wallet system never caught on, likely because it requires installing a new device reader.
There is a viable alternative: a universal payment card that functions as a credit card. These “smart” cards are accepted anywhere credit cards are accepted. Customers can load information from multiple accounts including debit, credit, loyalty cards, and in some cases, gym memberships.
There’s only one downside to these cards: it’s still a card. Customers want to use their smartphone to pay, thanks to the seamless mobile payment system engineered by Starbucks. This system was built to prioritize the customer experience, and it does.
To build your own successful mobile payment strategy, there are quite a few lessons to learn from the retail giant leading the entire trend.
Customers are starting to expect in-store mobile payment systems
Thanks to the system used by Starbucks, customers are starting to expect others stores to move toward providing in-store mobile payment systems. If you don’t, at some point in the future, your business will be considered archaic and customers will be disappointed.
For an accurate picture of how much customers love mobile payments, consider that in the first quarter of 2013, Starbucks processed just 2.1 million mobile transactions each week. By the third quarter of 2015, Starbucks was processing more than 9 million mobile app transactions per week.
According to North American Bancard, a forecast by Transparency Market Research predicts wireless payments via smartphones and other mobile devices will rise to a $411 billion market by 2022. The World Payments Report from 2017 agrees, and expects an increase in payments from other devices like smartwatches.
Your mobile payment strategy needs to be simple and user-friendly
When Starbucks rolled out their mobile app, it wasn’t just for entertainment. The Starbucks app stores customer information, including how many stars they’ve earned and the monetary balance for their gift cards. The app makes it easy to reload with a saved payment source. Recently they added the ability for a customer to place an order and pay before they arrive. Their app created a single point for all interactions that take place between the customer and the business.
Instead of fumbling around for a plastic card, customers open the app on their smartphone (or iPad) and scan a barcode at the register to pay.
This system works well for several reasons. First, Starbucks figured out through observation that most of their gift cards were purchased for personal use. Of all the gift cards purchased, 75% were being loaded and reloaded by the original purchaser. So they merged their gift cards with their loyalty program on the same electronic system.
Your mobile payment strategy should maintain product quality
If you’re considering launching a mobile order platform in the food and beverage industry, this is where it gets tricky. As Starbucks learned, and baristas already knew long before, by the time people pick up a mobile order, their drink will have lost its quality. Blended drinks melt, hot drinks get cold, and whipped cream disintegrates.
Chipotle – a brand that also launched a mobile order platform – discovered the same problem when people took a long time to pick up their order. They also realized the mobile orders impeded the flow of helping their in-store customers. To solve these problems, they added a second “make line” dedicated only to mobile orders, and added an option for customers to choose their pickup time.
The key is to create a seamless user experience
Millions of businesses around the world have gift cards that people reuse, yet the twin-tailed siren seems to be the only major brand that can be interacted with completely within an app. At least for now.
The Starbucks app works because customers can place an order, pay, and even reload without having to set foot in the store. That doesn’t mean your mobile payment system needs to offer the same options. Your customers may have no reason to order ahead of time. You should only offer what your customers want and expect from your business.