Mobile Payment Systems are systems that benefit both consumers and businesses by letting consumers pay by mobile devices.

Mobile Payment Systems’ Advantages For Consumers:

  • Convenience: It makes the payment process easier and less complicated. Now customers can make payment anywhere at anytime with their mobile devices connected with InternetThey allow customers to seamlessly purchase products or services with having to physically hand over cash or swipe a card. Consumers are eager for quick, in-and-out shopping experiences.
  • Security: By using mobile payments, consumers no longer have to assume the security risks associated with cash or worry whether they have enough cash in their bulky physical wallets so that mobile payments reduce theft risks of having cash on hand. Moreover, mobile payment is a secure way to pay. Credit card information are not stored on smartphones directly but in the cloud. So no thief could extract your credit card details just by stealing your phone.

Mobile Payment Systems’ Advantages for retailers:

  • Cost: One valid advantage are the lower costs of using a mobile card reader or barcode scanner than having a credit card terminal from a bank, which charges merchants with a monthly fee plus transaction fees. Mobile app owners need to pay setup costs for a terminal.
  • Engagement: Offering mobile payment options to customers, both online and offline simply makes the purchase process easier for them. This can increase conversion rates and the number of returning customers. Moreover, businesses are able to speed up the checkout process and capture the business of impulse buyers who may have been less able to buy something if a traditional transaction were required.

Nowadays, more and more online shops are offering their customers to pay their order online with their mobile device using Google Wallet. It’s a win-win situation: customers can easily skip filling out annoying forms and purchase an item with only one click.

This will most likely increase conversion rates and revenue. Catching this trend of mobile era is nothing but one of the most ideal and potential choice for retailers.


SMS Payments

SMS Payments are currently one of the most popular methods of using mobile phones to pay for goods or services, or even for person-to-person payments and many experts believe that due to the simple nature of SMS payments, the fact that all the user needs is a phone with SMS capability, SMS payments will continue to be a growth area in mobile payments.

But in addition to these text payments there are two other methods of using mobile phones to pay for items and services.  These are NFC payments and WAP payments.

NFC Payments

Near Field Communication (NFC) payments are a growth area in the field of mobile payments.  NFC phones communicate with each other and with NFC enabled points of sale, using radio frequency identification.  The mobile phones don’t have to touch the point of sale or each other to transfer information, i.e. money, but they have to be fairly close within four inches/ten centimetres of each other.

In China NFC is accepted as a means of payment on all public transport and in Japan NFC is also being used to provide identity card information.  In Nice visitors and residents can use NFC to purchase almost anything.

NFC involves a direct, almost instantaneous transfer of data between phones or phones and Point of Sale devices and many mobile phone operators are looking at ways to further develop this technology.

WAP Payments

WAP Payments simply means using the Wireless Application Protocol (WAP) facility on your Smart phone to connect to the internet and then using an online payment method such as PayPal, Google Wallet or Yahoo Wallet or simply entering your credit card details into the payment box on a company’s website.

Some mobile network operators allow users to pay for WAP Payments directly from their mobile phone bill as with standard SMS payments.  Companies wishing to accept WAP payments need to talk to a SMS payment solutions company to ensure they get a WAP payment gateway installed on their site.


The first generation to grow up online — Gen Z— is also poised to rank as the most demanding consumer group in history.

That’s according to a new report from Fung Global Retail & Technology, which warns that retailers, restaurants and leisure companies will have to adapt to the wants and needs of Gen Zers (refers to those born in 2001 and later.

Having grown up with social media and assuming instant access to almost all things digital, from music to video to information, Gen Z want it all — and they want it now as they acquire apparel, cosmetics and experiences.

“The new technology products and services have broadened consumers’ range of choice and quickened the pace of life,” said Deborah Weinswig, managing director of Fung Global Retail & Technology. “It is hard not to see these creating a more demanding, image-conscious consumer.”

Gen Z comprises 19% of the U.S. population, and will rise to 25% in 2020. In the EU, the generation accounts for 16% of the population, and is forecast to peak at 21% in five years.

The only generation to grow up with the on-demand economy, Gen Zers likely will continue to be highly demanding consumers, whether they are requesting instant access to video, ride-hailing apps or delivery services.

“Exposure to near-infinite choice and access to near-endless information makes this generation more demanding than any of its predecessors,” Weinswig said. “As Gen Z matures, it will become more discerning, but its demanding nature is unlikely to be diluted. We think brands and retailers will be the ones that need to change, because Gen Z looks unlikely to compromise on its high expectations.”


Consumers depend on mobile devices and search for online and offline shopping, according to a new Google study.

More than two-thirds of smartphone owners use their devices to purchase products or services weekly, according to the report “Mobile Has Changed How People Get Things Done” from Google Inc. released today.

Google worked with research firm Purchased for the study to find out how consumers use devices throughout the day. The study polled 1,000 U.S. smartphone owners several times a day for a week in Q1 2016, resulting in more than 14,000 responses.

The study finds that consumers are turning to their smartphones to take care of any need they have, including shopping. 69% of consumers say they chose their smartphone to address their needs because it is the closest device to them at the time, 60% say it is the easiest device to use to address their needs, 49% say their smartphone is the device they always used to address their need and 36% say their smartphone provides the best experience to address their need. Consumers could pick more than one response.

In terms of shopping, 92% of people who search on a smartphone make an offline or online purchase related to the search within a day, the study finds. 76% of consumers who search on their smartphones with the term “nearby” in the query visit a related business within a day, and 28% of those searches result in a purchase, according to the study.

In addition, the study finds 70% of consumers take an action on their smartphone, such as conduct a search, look at images online, or use social media before making an in-store purchase.  Of consumers who say they are in an “I need to buy” moment and then purchase offline:

  • 61% visit a retailer’s website or app before purchasing.
  • 45% visit a store or other location.
  • 39% use a search engine.
  • 26% visit a non-retailer website or app.
  • 15% look at photos online.

Consumers could select more than one response.

“Smartphones are a new front door to the businesses around us,” says Lisa Gevelber, vice president of marketing at Google. “We see more and more people turn to their phones prior to making an offline purchase.”

Within the week of the study 87% of smartphone owners visited a retailer’s website or app on their smartphone; 81% of smartphone owners used their phone to find business information, such as store hours and product availability; and 82% used their smartphone to research products or services, according to the study.

Of the consumers who visit a retailer website or app to meet their needs, 53% do so on a smartphone, 11% on a tablet and 39% on desktop. (Consumers could pick more than one response.) Among consumers who visit a retailer’s website or app:

  • 38% do so because they know it will get them the information they needed quickly.
  • 37% say they know it will most likely have the information they are looking for.
  • 25% say they always start there for this type of need.
  • 25% say they find the content most appropriate for this need.
  • 24% say they trust this source the most.

Consumers were asked multiple times a day for a week, so this data represents total responses.


Google is updating its smartphone search algorithm to penalize mobile sites that display pop-over content that covers most of the page’s content.

Google Inc. will ding websites in smartphone organic search results if the page displays a full-screen ad known as an interstitial banner, the search giant says. The change will take effect Jan. 10.

Google’s actions target websites that cover the page the search result directs to with a pop-up or other content that a user must dismiss before accessing the searched-for content. The penalty affects only smartphone search results.

The algorithm change is meant to improve a smartphone user’s experience when she transitions from Google to the web page, Google says. Although the content beneath the interstitial is sometimes still visible and Google can index the content, the search giant deems such displays a poor experience because the consumer cannot interact immediately with the site, Google wrote in its official webmasters blog that announced the change.

This change is significant for retailers. Google dominates mobile search—89% of organic search visits on mobile devices were made via Google in the United States in the first quarter of 2016, according to performance marketing agency Merkle Group Inc. On average, retailers in the Top 1000 receive 10.44% of their traffic from natural search, according to

Plus, e-retailers often use interstitials to promote seasonal sales, gather email subscribers, offer a customer survey or promote users to download an app. Retailers should review their use of pop-over content on pages indexed within mobile search results, and make sure such content complies with Google’s new guidelines, says Brian Klais, founder and president of mobile marketing and mobile search engine optimization firm Pure Oxygen Labs.

“This update will force retailers to rethink best practices in email marketing as well as consumer experience surveys,” Klais says. “Retailers should not assume their high rankings will automatically translate into a hall pass on this new point. Conduct an audit to be sure.”

Pop-ups that encourage a shopper to sign up for an email subscription list—often while offering a pot sweetener such as a percentage off of a purchase—are an effective way for e-retailers to gain subscribers. E-retailers that use them grew their email lists by an average of 47.87% year over year, according email marketing firm Listrak, which surveyed more than 400 of its e-retailer customers last fall.

Google says not all pop-ups will be penalized. It makes exceptions for interstitials that have to appear because of a legal obligation, such as age verification; those that display a login because the content is not publically available, such as a news site behind a paywall; and pop-over displays that take up a “reasonable amount of screen space and are easily dismissible.” Google cites small app-install banners that mobile browsers Safari and Chrome provide as examples of interstitials that consume “reasonable” screen space.

Retailers such as Touch of Modern Inc., No. 259 in the Internet Retailer 2016 Top 500 Guide, Gap Inc. (No. 20) and Groupon Inc. (No. 26) currently use interstitial tactics. Touch of Modern immediately shows an interstitial banner asking consumers to log in to its members-only site, which is a Google-OKed popup. The retailer is unsure if it will make any changes as it is too early to see how this change will impact them, if at all, a spokeswoman says. Groupon and Gap did not respond to a request for comment.

Interstitials are just one factor among hundreds of signals Google uses for its smartphone search results ranking. If a web page contains an “illegal” pop-up but it is still is a strong match for the search query, the web page may still rank highly, Google says.

Google has made several smartphone-specific algorithm changes within the past few years, including one in September 2015 that similarly penalized retailers for having pop-ups that asked consumers to download a company’s app. This algorithm update will fold that rule into this one, Google says.

“Mobile users have been frustrated by this for years now thanks to companies like Yelp and Trip Advisor and others who have abused interstitials to force mobile users to install the app to proceed,” Klais says.

In fact, when Google implemented the app interstitial penalty in September, Yelp Inc. was outraged. Yet, the customer review site did not change its tactics and continues to show a full-page interstitial prompting consumers to download its app after clicking on a link from mobile search results.

“Google saw its users fleeing mobile search via an exit door that led to apps,” Luther Lowe, vice president of policy at Yelp, told Vertical Web Media last year when Google made the announcement. “To make sure they can continue to extend their search monopoly onto mobile, Google is essentially telling app developers, ‘We’re losing too many of our users to your apps, so your new users will have to go through a doggy door.’”

While businesses may not want to change their marketing tactics, they shouldn’t be surprised by this change, Klais says.

Google wants to maintain their leading position in mobile search, and we all know mobile searchers expect Google to serve relevant results,” Klais says. “Google is saying it may stop ranking your content highly if you are making it difficult for Google searchers to consume indexed pages.”

Tyler White, senior analyst at Adobe Digital Insights, also is not surprised by the change, as Google prohibited the use of interstitials in its Accelerated Mobile Pages project. AMP is an open-source framework that allows businesses, including retailers, to build lightweight mobile pages that load as fast as possible on smartphones.

Google also announced it will remove the mobile-friendly label it added beneath smartphone search results that met this criteria. Being mobile friendly still matters and those standards for the ranking remain, but 85% of pages in organic search results meet Google’s standard and it no longer felt the need to label them.


Mobile wallets are slowly gaining adoption, but retailers’ offerings are currently the winners because they can be easily integrated with loyalty programs, providing an incentive to use them.

Many experts believe that mobile wallets will  continue to grow, and by the end of the decade, be universally adopted. Retailers such as Dunkin’ Donuts and Starbucks are leading the charge in terms of brand-led mobile wallets and are seeing significant adoption rates while platform-led services such as Apple Pay and Android Pay mobile wallets are lacking in comparison, but will likely see more users in the coming years.

“For merchant wallets, the vested interest in making them work and the ancillary benefits around marketing data garnered from wider use creates a broader demand in an organization to put incentives to put them in place and the mobile wallet investments successful,” said Joseph Walent, senior analyst of emerging technology advisory service at Mercator Advisory Group. “In my opinion, the main reason for the drag in universal wallet space remains lack of acceptance, be it real or perceived, coupled with a lack of marketing effort beyond the initial set-up the phone.

“While merchant specific wallets will likely top out in the next couple years, the usage of universal wallets will expand dramatically by the end of the decade,” he said.

Loyalty and mobile
Retailers can leverage mobile wallets to shape consumer behavior by prompting them to come in stores and purchase with rewards and the process of earning rewards. Mobile wallets and loyalty offer incentives for using the program, therefore consumers are more likely to leverage retailers’ mobile wallet programs as they have more to offer.

The mobile wallet applications are highly beneficial to retailers beyond just rewards programs. Retailers now have the ability to garner a wide range of data to better serve consumers and have the capability to send push notifications and keep them fully connected.

“Mobile wallets are a highly effective customer engagement tool,” said Danielle Brown, vice president of marketing at Points. “Through mobile wallets, marketers can reach consumers at the point of sale, through a channel that is most convenient and relevant to them.

“Not to mention, the convenience of being ‘mobile’ enables marketers to target consumers with greater precision and deliver hyper-relevant offers through geo-location targeting,” she said. “Additionally, when loyalty rewards are integrated with mobile wallets, they can be used to drive specific consumer behaviors.

“For example, marketers can incentivize mobile wallet use by incorporating existing loyalty programs and making targeted offers.” 

Millennials and mobile
Mobile wallets will likely see an uptick in consumer usage once all retailers have accepted NFC terminals and more NFC-enabled phones arrive on the scene. Apple is seeing growth with Apple Pay numbers, but mainly outside of the U.S.

Once consumers in the U.S. have gotten used to mobile payments and mobile wallets, there will be a drastic change with bricks-and-mortar retail. For now, the growth is steady and will likely see significant usage by 2020. 

Another significant factor for mobile wallet adoption is millennials and their spending. Millennials are not spending and valuing deals and savings rather than purchasing, but they are the demographic most likely to take on mobile wallets as they are more comfortable with technology.

As millennials grow older in age and become more comfortable with spending, mobile wallets will likely see greater adoption.

“Mobile wallets are growing steadily, Apple just reported some fairly strong results, particularly in non-U.S. markets,” said Thad Peterson, senior analyst at Aite Group. “Growth will continue as the next generation of NFC-enabled phones come online and as NFC-capable terminals are installed. It’s not going to be a ‘hockey stick’ growth rate, look for steady growth until around 2019-2020, then usage will ramp up. 

“We need three things to enable mobile wallets,” he said. “Critical mass of NFC-capable terminals at POS, critical mass of NFC-capable smartphones and millennials to move into a spending phase of their lives.

“Once those pieces are in place, mobile payment growth will accelerate.”