As merchants and consumers evolved from using cash and writing checks to more convenient payments tenders like credit, debit, and plastic gift cards, marketers were able to take advantage of collecting customers’ purchasing data. What didn’t change though was the simple fact that any type of payment was a means to an end – transferring money from one hand into another. Major credit, debit, and prepaid have been competing for years by offering a lower transaction cost than its competitor to sign up merchants. As it becomes a “how low can you go” game, payments whether paper, plastic, or mobile are still nothing but a commodity.What merchants have yet to obtain from a payment system is one that integrates marketing tools that better connect the customer to the purchase and further purchases, a wrapper around each transaction. Even for the merchants that have implemented some sort of loyalty program, an integrated solution of payments, marketing, and loyalty is rare or not utilized effectively.
For example, an underutilized customer loyalty program is found at many supermarket chains across the country. Customers are given free discount cards that are registered to their name. Every time the card is swiped a “member” discount is given and every item rang through that transaction is recorded. After the transaction the customer leaves and the cycle is repeated during the next transaction.No where between the customer leaving or returning does the supermarket connect again with the customer. With learned behavior of each individual customer, the supermarket should be able to offer discounts on similar products or exclusive offers when a customer purchases a certain amount. With such offers, customer loyalty changes as quick as the next advertisement of weekly specials is released.
Mobile devices have the features to change the connection between merchant and customer by allowing merchants real-time monitoring of customer behavior. With a payment solution that integrates marketing tools (SMS, location-based offers, etc.) and loyalty, merchants will see an added value in mobile payment tenders beyond that of just an alternative.While expensive equipment might be the main reason for delayed adoption of NFC, the commodity factor plays a large role in whether merchants NEED another payment tender. Added value will be the determining factor of mobile payments and of any next generation tenders, as merchants look to open additional sales and marketing channels.