Payleven's Ian Marsh on mobile chip & PIN and 21st Century payments

OPINION: Does retail face a cashless future?

Ian Marsh, UD MD of chip & PIN payment provider Payleven, shares his views on 21st Century payments and a cashless future for tech retailers.

The payment landscape has undergone significant changes over the past few years.

Cash, once the standard, is on the way out, as consumers increasingly look towards card as their primary mode of payment. Once unimaginable, it’s now possible to envisage a cashless future.

Indeed, there is now an increasing expectation amongst consumers to be able to pay by card, even for the smallest transactions. For example, recent research by RBS has found that there were more than 333 billion non-cash transactions made in 2012. Businesses that wish to survive in a competitive market need to meet these demands in order to serve customer need.

These demands are becoming increasingly met by mobile payments, a transaction completely divorced from customers’ cash and cards. Unbound from the fetters of cumbersome card terminals, mobile payments seem to be the way forward, with big players such as Apple and Paypal already launching forms of mobile payment and mobile wallets. These developments are beneficial for retailers because they offer a flexible and cost effective way to get paid.

However, there has not been a significant rush towards embracing these new forms of payment amongst the consumer. 

This lack of enthusiasm has a lot to do with an absence of confidence. Consumers simply do not trust new forms of payments until they have been tried and tested. Furthermore, recent technical malfunctions have not lent themselves to inspiring trust.

Only recently, Marks and Spencer’s mobile payment offering double-charged some of its customers, whilst a group of students at a university in Newcastle created an app that can read mobile devices and take the data criminals need to plunder accounts. Clearly, there are a number of issues that need to be addressed and, in my opinion, card payment remains a trusted option.

As card payments have the benefit of being deeply ingrained behaviour among consumers, and one that does not seem to be lessening, employing mobile Chip & PIN could be a suitable option as it has the advantage of operating on existing trust. It is also the safest solution for mobile card payments on the market as it requires PIN authorisation for payment.

However, the key differentiator is that they are completely portable, flexible and cost effective. They do not come with a hefty monthly subscription fee to run, but only with a small percentage charged on every transaction. 

The flexibility of these devices is what makes them so useful to retailers. Mobile Chip & PIN offers a viable way for retailers, especially smaller operations, to increase their revenues by offering an accessible route to card payments.

Furthermore, beyond being within reach of retailers that may not have large financial resources, they trade on existing customer confidence.

Consequently, mobile Chip & PIN offers a modern form of payment that customers are actually prepared to use, and in turn, contributes to an increase in revenue; the bottom line for any retailer.

About the author

Ian Marsh is UK MD of Payleven

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