28 Jan Why Retailers Should be Evangelists for Mobile Wallets
Given the security breaches of the past few years, you would expect that banks would be requiring PINs on the new credit cards they are rolling out. This is what the rest of the world does, but the U.S. has been slow to adopt the more advanced card security standards. This puts retailers in a tough spot: many of the breaches could have been thwarted by better security protocols on consumers’ payments, something they are not necessarily in control of.
Enter digital or mobile wallets—one of the few methods of payment that can fully meet all three multifactor authentication requirements. Using your phone can authenticate a knowledge requirement, such as a PIN or password. It can authenticate biometric identity through a fingerprint, and it can also prove ownership through the phone itself. While it is true that your phone can be stolen, it is unlikely that a thief will have all three of these requirements, should they attempt to use your phone for purchases.
Retailers should be out there helping these services take hold, rather than dragging their feet on the issue. Granted, some of them will try and do these payments through a proprietary service–and this takes time. But personally, I’d rather not have all my data in one space, anyway—and by using a third party service, it would disperse the risk.
Whatever the implementation method, the potential benefits of accepting payments through mobile wallets and digital wallets are numerous. Besides better security, they can provide retailers with a bounty of digital marketing, loyalty and customer data opportunities. Mobile wallets also offer cost and operational efficiency advantages in the form of reduced fraud expenses, lower payment processing fees and faster checkout times. Savvy merchants will commit to not just the technology, but also to developing marketing strategies that convince consumers to use this unfamilar–but mutually beneficial–payment method.