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Is payment transformation on the way?

Is payment transformation on the way?

Apple has recently unveiled Apple Pay to great fanfare, which allows customers to pay using their iPhone. A rival payment system is under development called CurrentC, which is being created by a consortium of large retailers. Without placing any bets, it’s clear that there will be significant activity around the “digital wallet,” allowing customers to speed up their payment options. Self-checkouts have been around for years and Kroger is working on some cool technology that could rapidly speed the scanning process.

But, what about avoiding the checkout altogether? With nearly two-thirds of customers now using some sort of smartphone, we are not far away from what might be both a customer and retailer dream — the ability to check out in aisle without ever waiting in a checkout line. Customers get to bypass the wait and retailers can save on their largest single labor expense —the front end.

A number of companies have this technology in development or use today:

• Ahold has been a pioneer in this area with SCAN IT. What was once a rather expensive hardware laden scanning system is now morphing into an app on the customers’ own phone.

• Walmart has been deploying similar technology with their own mobile app called Scan & Go, which can be used in hundreds of stores currently.

• A start-up out of Madison, Wis., called Fetch Rewards is rapidly rolling out in grocery stores around the country. The system allows customers to scan items as they shop and then has a dedicated checkout lane.

The added benefit of all of these systems is that it allows for suppliers and retailers to load electronic coupons, effectively having the opportunity to motivate a customer right at the point of sale. This answers one of the questions — how do I incent customer to continue to use the device.

Throw in new technology like iBeacon, which enables a retailer (and supplier) to know exactly where a customer is within a store and you have the beginnings of a transformational in-store experience.

Yes, there are security issues associated with controlling shrink and data protection. And yes, there are issues with just how much a customer wants to be “messaged” while shopping. But, the ability to shop more quickly and efficiently seems like an effort that retailers and customers would be willing to invest in. And if Walmart cracks the code first, does it put traditional retailers at a further disadvantage?

What’s your digital transformation strategy?

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