Will Digital Wallets be as Ubiquitous as Credit Cards?

Talking Retail with Gil Roth, NCR Executive Vice President


We sat down with Gil Roth, Executive Vice President at NCR, to discuss the impact digital wallets are having on the retail industry. Mr. Roth focuses on the efforts being made by retailers around mobile payments, offering his perspective on current adoption cycles including the pitfalls currently associated with mobile payment technology.


Q:  We see a sense of urgency for retailers to embrace this emerging technology. Why do think this is so?

A: Because most customers today are constantly using their smartphones and tablets in and out of the store, retailers need a method to handle in-store or online transactions that allow them to take advantage of this new digital environment. Digital wallets open up another channel for engaging and transacting with customers, securely speeding up a shopping visit. And with more Millennials than Baby Boomers by 2017 according to industry research, the digital need becomes even more of an imperative right now.


Q: What is the right approach when considering digital wallets… going it alone or being tech agnostic?

A: That is a question being considered by many retailers when evaluating digital wallets. For some retailers, building their own digital wallet may take more time and resources but it may also allow them to own more of the customer interaction. There are digital wallet applications they can buy, white label and then brand for their own specific use, and thereby reduce time to market. If they are a large or multinational retailer, this may be the approach to take. On the other hand, for smaller retailers or retailers who want to be platform agnostic, the answer may be with one of the leading digital wallet providers who have an easy-to-deploy solution. Recent consumer surveys indicate that shoppers may feel more confident utilizing a digital wallet application from their credit card banks, PayPal or Amazon instead of a proprietary product. The only issue with this approach may be a retailer ceding some data or transactional ownership to one of these bigger providers.


 Q: What are the security issues specific to digital wallets or mobile payments? Should that be a concern?

A: Security is obviously a big issue not just for the consumer, but also for the retailer. Because a digital wallet contains personal information about the consumer (for example, credit card and banking information), protecting that information is essential. There are two distinct approaches being taken when it come to digital wallet applications. One is where the personal and financial information resides directly on the mobile device. The other one is cloud-based where the wallet accesses the information that is stored on a secure server. There are a number of leading vendors investing in these two approaches. Retailers will need to determine which one works best with their overall retail strategy.


 Q: Do you think digital wallets will become as ubiquitous as debit and credit cards?

A: The jury may be out still on that one. But with consumer mobility such a major and growing factor in retail, digitalization especially around payments is definitely evolving the consumer-retailer relationship. Shoppers want ease of use, speed and convenience at checkout and their mobile devices can offer them those benefits. Next generation POS, which will transform the store experience, will offer the digital interoperability essential for digital wallets to become business as usual. As digital wallet providers consolidate and standards are adopted, it may be that mobile payments become as easy as using cash or a credit/debit card.


Q: Any remaining thoughts regarding mobile payments?

A: Retailers need to quickly adopt a strategy to address mobile payments including digital wallets. We live and do business in a mobile first world. Digital wallets tied to the latest in POS technology can truly enhance the brand by driving greater shopper loyalty. Remember, it is about reaching the new empowered shopper and mobile payments offer that ease of use these tech-savvy consumers demand.


To learn about the bigger roles digital wallets and mobile payments are playing in the retail space, please visit www.ncr.com/retail today.