2016: The Year Mobile Payments Take Off?

2016 will be a very good year for you to consider jumping into mobile payments as a consumer or a business if you haven’t already. The primary reason for this is that the infrastructure at businesses and in the smartphone and tablet market has grown enough so that making and receiving mobile payments is something that will enhance your business or shopping experience.

Here are some of the top mobile payment trends that will affect customers in 2016:

Fast food mobile payment applications will continue to grow: When it comes to mobile payments, the trend toward accepting payment by phone is nothing new for the leaders in the fast food industry. McDonald’s accepts Applepay while Burger King allows Paypal payments. The rest of the industry is currently under test with different systems, although Kentucky Fried Chicken has recently added mobile payment capability and Starbucks allows customers to pay for Starbucks cards by phone with Paypal.

What consumers have discovered by using the mobile applications is that the fast food corporations are putting a lot of effort into making the payment experience as seamless as possible. Constant updates and upgrades show that the companies are using solid feedback to enhance the experience. Customers are also finding that there are better deals available when they do pay by phone. Burger King, for example, offers 2 large sandwiches for 5 dollars as part of a special for restaurant clients. Yet for their application users, there is a coupon that gives them two large sandwiches and two orders of fries for 5 dollars, a much better deal.

The positive side of having more applications released in 2016 is that it will be a year in the US and abroad that will allow users of the applications to flout their market power in ways that haven’t been seen since Internet purchasing started. This is largely because users will be part of a smaller group of people that the companies want to encourage to grow.

There are potential negatives, however. So far, many fast food franchisees have decided that they do not need to obey their corporate owner and honor payment by phone. That can leave application users stranded if they go to order and find out that the store has not installed NFC communications necessary to complete a transaction. It is a good idea, therefore, to ask before you order. Another problem is that accepting payment by phone through the cashier’s terminal is not something that all employees are trained on. In one instance, a patron had 22 dollars taken from their Paypal account for a 6 dollar sale. Most commonly, however, there is a delay while the cashier learns how to process the transaction, making the entire transaction much slower than it would be paying by any other method. One of the best ways to counter a lack of training is to have your order completely ready when you arrive at the cash register so that you minimize any confusion on the part of the worker.

In 2016, with most chains looking at implementing their own application, the data they receive should give them a much better picture of who their customers are. For the user, the largest benefits will remain the special treatment that they receive through better deals and the security of not having to open their wallet in certain neighborhoods.

Consolidation of 3rd party aggregators should continue: It was a good idea to offer goods and services in the form of a mall that had ties to bricks and mortar stores that could fulfill a mobile order for delivery or pickup within minutes. Unfortunately, as 2015 showed, companies like Grubhub ended up with fewer restaurants signed up in some cities. Part of the problem has been that although paying via a mobile device and browsing through several restaurants that are available is actually a more natural way for customers to look for a meal, it is the case that some restaurants do not stay in business and others decide that the service is not what they want to do with their restaurant. The net effect is that for customers that are not in the San Francisco Bay Area or Manhattan, 2016 could be a year of diminishing choices for them using online ordering applications from their mobile device.

The positive side for most users is that the aggregators will be fighting hard to keep them as customers. They therefore may use coupons and other incentives that make using their application a compelling option. Another positive is that several chain restaurants may move to using their own application exclusively, allowing a user to experience benefits from their application as well.

On the down side, consolidation obviously means less choice at a time when over 60 percent of mobile users have made a mobile payment. When you couple that with the fact that most smartphones are capable of making mobile payments, it can be frustrating for both retailers and customers that want to pay via smart phone more often. For users in 2016, the best way to overcome this continues to be to leverage the additional storage that comes with new smart phones to add individual restaurant applications to replace aggregators if you are in a city that does not have a lot of choice.

Overseas, the consolidation trend is occurring as well. Sindelantal in Mexico is quite strong in certain cities, but has had several restaurants either close or opt out in places like Baja. In some ways, however, that is a net positive for customers in those areas because they are likely to continue to receive marketing attention in 2016 that will give them even better deals and discounts.

Big box will move towards direct mobile: Although you can already order and pay from your smartphone at Walmart and Kmart and other large retailers, it is not really that possible to instantly just show up and pay for a purchase with a smart phone or pick things out from an application while you are in the store and then pay and pick them up at a cash register. In 2016, this will likely change for some stores. Kmart has been offering same day in store pickup and has done a good job of fulfilling most orders that are in stock within a few hours. Walmart has improved their online application so that users can actually see what is in stock in a store before they order it so that they have the potential of picking it up the same day or the following day.

The positive impact of retail giants striving to prepare goods purchased with a smartphone so that the purchase is more seamless should allow customers to use their applications more. Walmart in particular also allows the same system to be used in its stores in other countries, giving access to millions of people that may not otherwise have a system available to them.

Customers will see some negatives, however. The online ‘in stock’ labels that come with some of the items that big box retailers list are not always accurate, making it possible for customers who have ordered to experience delays. Fortunately, most retailers allow you to cancel an order up to the time that it has been fulfilled, making it easy for clients to use an alternate method like purchasing an electronic gift card and then walking into the store and using it to pay.

The impact throughout the Americas in 2016 should be strong because consumers are already spending online. The more seamless big box gets, the greater the chance that they will be able to close the gap with Amazon.com, which is larger than all retailers combined online.

Overall, 2016 is shaping up to be a year where trends in mobile payments bring greater freedom and choice to consumers in North America, Europe, and Asia. And while it won’t be a watershed moment in history, it will continue an overall trend towards mobility that has been building for several years now, benefitting those who jump aboard.