The Challenge of Making Mobile Payments Work at the POS

This weekend I paid with PayPal in the physical store. There are a handful of stores in the UK that now accept PayPal payments, and while I've seen the demos, this was my first time to actually go through the process myself. And I have to say, it's not something I will be looking to experience in a hurry again... The good news: the payment worked, first time. Which is more than what I can say about my NFC experiment with QuickTap wallet from Orange (EE) and Barclaycard. There, my experience has been very inconsistent - sometimes it works like a dream, other times it doesn't work at all. The worst is when it's not even clear if it worked, and at least one of us, either me or the merchant, is left scratching our heads if we ended up short-changed, either by paying cash or card or by assuming the payment did go through. None such problems with PayPal - the payment went through and I got instant acknowledgement of the transaction. The bad news: it took forever, and required perseverance and patience on all parties. Luckily, there was not a queue behind, I was determined to do it and the cashier was curious and willing to go along with me. I was prompted to pay by a sign "Pay here with PayPal" (or something to that effect), which is how it should be - clear signage at the till that a particular payment method is welcome here. Frankly, I am getting tired having to ask if the merchant would take my Amex card, as often there is no sign of what types of cards are accepted anywhere near the till, which is where it is most useful. My cashier had no idea what either of us should do for me to pay with PayPal. Luckily, her manager was around and he was able to direct both of us. That is something I highlighted in my report on NFC lessons learned equally applicable here - merchants should train their front-end staff, not just managers. The first step was to fire up the app and log in. Now, this is my fault - I haven't set up a PIN on my PayPal account, so had to type in my full email and password, which seemed a very cumbersome thing to do on the phone. PayPal supports an easier option, and even "Remember me" feature, which would bypass the requirement to log in altogether, although I am not convinced I would want to do that for security reasons. Then I had to find the shop to "check-in" for payment. The shop was called Blacks, an outdoors retailer, but did not seem to be on the list of local retailers. I saw in the app corner "an ad" that "PayPal is now accepted at Blacks" and clicked on that. However, according to the list the nearest shop was miles away. At this point, the manager said, "Oh, we used to be called Millets, so we are probably still under that name." He gave me the specific address, and sure enough, I found that particular Millets store on the list in the app. Strangely though, according to the app, the store was apparently 1.6 miles away, even though I was standing right in it... Another lesson: if you are providing a list of retailers accepting your solution - certainly a good thing to do - make sure it is up-to-date and the geolocation works properly. Having found the store, I was ready to "check-in" and having waited for the app to process the request, I received a bar code and a long number. The cashier said I had to type in the number into their terminal. I thought they would just scan the bar code, but apparently they couldn't, so I ended up typing in a long (if I recall correctly, 10-digit) number into the POS terminal. After another long delay (the cashier: "wait, wait, it's doing something!"), the payment went through and I was done. Much of the delay was down to general slowness - every step seemed to take ages to move to the next level. I can only assume it was because I was on a 3G connection; presumably, a Wi-Fi or a 4G would have solved much of that problem. Throughout all this, my wife was patiently standing by my side with a puzzled expression on her face. Finally, she asked a very sensible question: "Why?" Indeed, why go through everything I just went through - a painful log-in to the app, finding the store you are already in, waiting for the app to respond, typing a long code into the POS terminal, and more waiting when I could have just inserted my chip and PIN card into the same terminal slot and be done in seconds? After all, my payment ultimately will come out of the same card I would have used anyway. To be honest, I didn't have a good answer to my wife's question. The most obvious and immediate benefit is that I didn't have to use my card at the merchant, which after Target and other data breaches would be a legitimate, although probably still not strong enough argument in the US. Because of EMV, here in the UK, that argument is even weaker. I know the vision is that I will be getting local and unique offers, etc., but again, there are and will be other ways for me to receive those offers, including linking them directly to a card. Digital receipts? Definitely not worth the extra hassle, at least for me personally. Now, I have to make one thing clear - I have a lot of respect and admiration for PayPal. As I discuss in my recently published report on Top Trends in Retail Payments, in my view, they have made probably the most progress of all the open digital wallets. They get what it takes, and they have most of the ingredients to be successful. The fact that even they struggle to deliver a superior customer experience is not a slight on PayPal, but simply demonstrates the scale of the challenge for the industry. Despite all the challenges in delivering it consistently, when and where it works, contactless "tap and go" experience is at least as good as a regular card transaction. Contextual payments, which are seamlessly integrated directly into retailers' or service providers' mobile apps, with which I can meaningfully engage to receive a service (e.g. hail a taxi), definitely make life easier. And "push" payments directly from a bank account (e.g. Zapp) at least give me something different (e.g. increased control over the transaction - view the balance before paying, etc.) Mobile payments certainly have a future, but they have to do much more than add a complex front-end to a card transaction. Otherwise, my wife won't be alone in asking "why?"