We continue Impact 21's Steve Patterson look at how customers are engaging in Foodservice and Financial Services. Steve serves as a Principal Consultant with expertise in Payment Methods, Point of Sale Implementation, Technology Infrastructure, Enterprise Integration, Financial Accounting & Analysis.Continuation

Part 2 of 2

Do you feel Near Field Communications (NFC) will be widely accepted by retailers? By consumers? When? 

I know people who still write checks, and they are normally in front of me at the grocery store checkout, talking on their “flip phone.” I have a mobile wallet, deposit checks, buy a grande Pike’s Roast at Starbuck’s and pay for my Amazon purchase with my smart phone and fingerprint. So, I realize I’m a bit ahead of the curve in accepting alternative methods for transactions.

Retailers need to look at what they are currently paying for interchange, not just the line item under fees, but the detail. A decrease in interchange paid could make it worth the move.
NFC can be a great way to perform a secure payment transaction that the consumer should perceive as being faster, due to their process interaction. In addition, the security of presenting the payment device to the transaction acceptance device gives me, as a consumer, greater sense of security and less concern over my account being compromised. 

Will NFC help stores increase revenue or customer experience? How? 

I doubt we will see an increase in a store’s traffic because they offer NFC. The challenge is getting the retailer to push the story out that they offer it. I loved the commercial about the guy ordering a sandwich at the deli, and the deli owner kept saying that the customer couldn’t pay with his phone, but he did. That needs to be expanded if NFC is going to grow quickly. 

I haven’t personally tested the process time impact of NFC vs. EMV, but as a user I find comfort in the security of the process.

What are the biggest concerns regarding Near Field Communications for retailers? How can these be addressed? 

Most retailers, especially smaller chains and single site operators, are unaware of how NFC works. Many just accept payment processing fees as unavoidable and they have never looked at alternatives to their current provider, bank, or brand. Retailers need to be educated on what it is and does and on a pro forma cost analysis of NFC vs. EMV (Card).

How can smaller chains, those below 50 stores, stay current in their technology? 

Smaller chains have most of the operating requirements of larger chains, yet without the resources and staff. Larger chains have dedicated resources available for project and change management. The IT staff (or person) at smaller chains usually has more pressing matters of problem resolution and day-to-day operations. 

Smaller chains that carry various fuel brands must conform to the rules of the brand. They are also dependent on the brand to certify the required POS software to support changes in the rules and policies.

Regardless, keeping current in technology requires the company management to:
  1. Stay informed. Attend trade shows and educational sessions. Join any user groups that relate to similar operations, including fuel brand groups, back office systems, and POS. Talk to your vendor reps and service companies about new programs available. Hit the NACS and Conexxus websites.
  2. Perform system upgrades when released. It will save time and reduce risk.
  3. Maintain a solid technology migration plan. You should have a list, or preferably a plan, for each project to be performed within 6 months, 1, 2, and 3 years. Technology plans beyond this time frame are too subject to change. 
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If you have enough budget and enough technology projects for an FTE, hire them. But don’t put off any critical project (EMV, POS upgrades, QSR Programs), that don’t justify a full time, trained resource, look outside for expert help. In most cases, you will save time and money. 

Can they trust some of these functions to outsourced companies? 

Most companies that provide outsourced services are highly reputable. It is just as critical to research a services outsourcing vendor as it would be a new employee hire. Reviewing user references, statement of work, performance guarantees, and contract terms should not be underestimated. Fortunately, there are many resources to get this information. 

What does the future hold for mobile payments? Will changes be driven by tech companies or consumer demand? 

I have a mobile wallet and I use it, primarily for online purchases. I believe it will expand as savvy tech companies tune into consumer demands. 

This will be as much a political battle as a consumer acceptance issue. Commercial banking has long had a stranglehold on the card processing structure and now startups and retailers are trying to force a change to the status quo. My bank is still telling me I should run my debit card as a credit, for “my protection.” They don’t mention the difference to the retailer’s interchange fee. Now there are new players, but the banks are creating their version of a mobile solution. Thank goodness Conexxus is already working on this.


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