Enabling the Mobile Wallet

By Richard Mader
The mobile phone as a payment and promotional device is coming to retail. The questions are when, what processes and under whose governance?

The RIS mobile survey published in May 2009 suggested an answer about when and processes. The survey finds that 47 percent of retailers will have a plan or be in pilot mode by the end of 2009 with another 23 percent by end of 2010. Customer marketing, targeted promotions including coupons and payments were identified as priority applications.

To enable mobile processing retailers have to implement a new infrastructure and new devices to connect the mobile network to internal and external networks. New applications will have to be developed or purchased and implemented. Educational campaigns will have to be created and executed to encourage consumers to utilize this new technology. 

Once again retailers are on the front line for social change. Not that long ago retailers had to move from cash to credit and then debit. They willingly did so to increase sales. First they operated their own in-house credit-issuing, proprietary cards only to see Visa and MasterCard dominate the credit markets to the point where today card companies collect an estimated $48 billion on interchange fees and dictate processing rules to retailers like PCI.

The Next Revolution
Retailers need to get ahead of the curve on this next revolution in consumer payment behavior and specify the policies and processes for mobile transactions. If retailers need to make the principal investment that enables mobile processing, then they rightfully should manage the rules of the game to ensure maximum consumer convenience and lowest costs by avoiding unnecessary fees.

As a service to its members and the industry as a whole, NRF is organizing an initiative to guide the implementation of mobile technology and its related retail business processes. The purpose of this effort is to gather information and make guidelines available that will help retailers develop standards, business processes, applications and devices for mobile transactions. It will incorporate retailer desires and absolute requirements for adoption of mobile technology within retail enterprises that will maximize benefits, minimize implementation expenses, and reduce on-going costs and fees. 

To this end NRF has organized an M-Commerce committee within its CIO Council that includes nine leading retailers representing department stores, foodservice, specialty and discount stores. This committee will define the strategic and tactical requirements for payment, promotion, loyalty, item lookup and other mobile enabled processes. 

To support this initiative it is critical that retailers begin now to investigate the potential benefits of converting processes to the mobile environment, associated technologies that need to be converted, security requirements and proposed payment methods. Interested retailers should submit comments and suggestions about these topics to either ARTS or the NRF.  If you sit on the sidelines, the policies and processes will be developed without your input and provided to you as a mandate, like PCI.

By participating you can ensure the creation of global standards for mobile processing that conform to retail business requirements. Victoria's Secret, Home Depot, Best Buy and BJ's, to name a few, are reported to be planning M-Commerce implementations. We cannot afford to implement and maintain multiple solutions. I encourage you to stay informed, get involved and provide suggestions to ensure retailers play a leadership role in the coming mobile revolution.

Richard Mader is executive director of the Association of Retail Technology Standards (ARTS) division of the NRF. For more information go to www.nrf-arts.org.