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A customer visits the supermarket, a department store or the gas station. At the cashier’s desk, she does not pull out his wallet, but pays by holding her smartphone to a payment terminal. This is how experts describe the future of mobile payment. If you can withdraw cash from an ATM using the portable device, for example, this is referred to as a mobile wallet. In Switzerland, this new world of payment is no longer a distant dream of the future, because in fact some retailers are currently introducing such services.
Switzerland is a “first mover” market regarding new technologies, so consumers are quickly adopting new technological developments. According to the latest estimates of the Federal Office of Communications (Bakom), about two thirds of the Swiss population had a smartphone in 2011. This number grew in the meantime, according to Bakoms’ assumptions. According to various studies, users of such devices look at their smartphone up to 180 times a day, and more than 80% of users never turn it off. In view of such intensive use, the idea of letting the mobile device play a role in payment transactions does not seem to be outlandish.
In a survey conducted by consulting firm Accenture in 2012, however, 62% of Swiss respondents said they were not interested in mobile payment services. Almost a third said they plan to use it, and one in ten said they were already using it. However, some Swiss companies seem to think that the demand will increase even once the offer is there. Many of the major retailers are currently launching mobile payment programs: Manor has introduced mobile phone payments at its stores and those of Jumbo at the end of September. Holders of a Manor card – a kind of credit card for the Manor branches – install a program on their smartphone with which they can pay cashlessly at the store. At the cash register, the customer generates a barcode with the Manor «App», which the seller scans and confirms the purchase.
Swisscom and Sunrise have also announced that they will support near-field communication (NFC) with their smartphone in cooperation with credit card companies. Since 2011, Swisscom has been testing this type of payment at McDonalds and Valora, according to media reports. SBB want to further promote the contactless sale of tickets, and Migros also offers its customers since November a similar opportunity, namely to pay contactless with credit cards with NFC chip.
One problem with the introduction of mobile payment, however, is that many smartphones, including the popular iPhone in Switzerland, do not support NFC technology. Furthermore, with regard to the technology and the handling of purchases, no standard has yet been established that would facilitate the introduction at smaller merchants. In Switzerland, for example, SIX Payment Services and PostFinance are seeking the role of a neutral platform provider. International players such as Paypal, Google and Amazon show great interest in this regard. But currently the market is still fragmented. Google sells about his own wallet, Apple has recently introduced a proprietary mobile payment system called “iBeacon”.
The skepticism of many customers is also based on security concerns, as an earlier survey by PwC shows. Many consumers fear that a thief could “scavenge” personal information from the smartphone, that they would be left without cash after losing the device, and that too much information was stored on their electronic wallet. Advocates of mobile payments counter that any generated barcode is only valid for a short time and the customer has to confirm transactions over 40 Swiss Francs with a PIN code. In addition, some merchants limit the daily spending to e.g. 120 Swiss Francs per day.
Source: NZZ, 7.12.2013