I might be the fastest draw in the West, perhaps faster than Quick Draw McGraw. It comes with practice – unfortunately too much practice. That’s right, a bill hits the table or a cashier finishes ringing up the sale, and in an almost unconscious state, I swiftly react. It’s one fluid motion. Hand reaches into pocket, pulls out wallet, and credit card slides out mid-stream. Three seconds flat. Are you impressed? Probably not. In reality, I’m probably not any faster than you. Unless, of course, you’ve got a George Costanza wallet that sparks a game of 52-card pickup each time you unleash its fury.

Speedpass to the rescue?

Although credit cards have been around since the 1940s, there has been minimal innovation to the consumer experience over those past 70 years. In 1997, for example, Mobil Oil Corp (now Exxon Mobil), introduced Speedpass, and I thought the future had arrived. Surely, every car owner would magically be waving one of these RFID keychain cards to pay at the pump in a flash. Then, I imagined us all using these to buy everything from groceries to Big Macs. So, why isn’t Speedpass a roaring success? How come it only reached 7 million users in its first 7 years?

The first issue – whether perception or reality – is related to consumer security. Nobody wanted to get hit with a $160 charge after their Speedpass inadvertently activated the neighboring pump – the one where an RV with a 100-gallon gas tank was about to fill up. The second issue was the lack of ubiquitous acceptance. Speedpass only worked at Mobil. Then, McDonald’s tested it out at 400 stores for a short time before shutting down the program. People didn’t want to carry a payment card that only worked with one merchant?  The final and perhaps biggest issue is that this new payment method simply didn’t improve enough on the process, or at least, not enough to spark a shift in consumer behavior.

Why do mobile payments turn me from Quick Draw McGraw to Droopy the Dog?

We’re now a mobile first society. Perhaps I should use my mobile device to purchase goods and services. That sounds promising – 97% of the time my mobile with me, 85% of the time it’s charged, and 75% of the time I actually have a decent signal. Even when all of these stars are aligned, today’s best mobile payment options still turn me from Quick Draw McGraw to Droopy the Dog. Three seconds grows to more than 11 as I pull out the phone, activate the screen, enter my password, open the payment app, enter a pin code, and then complete any other steps that are required.

Where’s my George Jetson Food-a-Rac-a-Cycle equivalent for payments?

Isn’t everything supposed to be faster, and more convenient, in the future? Where’s my George Jetson Food-a-Rac-a-Cycle equivalent for payments? Perhaps companies have been focusing on the wrong problem. If it ain’t broke, don’t fix it. From the consumers’ perspective, there is fundamentally nothing wrong with today’s payment process. Whether one chooses to carry cash, or a 0.2 ounce piece of plastic (aka a credit card), it’s not a tremendous inconvenience – neither is the 3 seconds it takes to present these payment methods. We’ve heard the promise of NFC for years, but even if the technology were standard in today’s average mobile device, and ubiquitously accepted by merchants, would NFC result in a substantial improvement to the consumer payment experience? Probably not. Similarly, the goal of creating a successful mobile wallet – even from powerhouses like Google – has fallen flat. They’ve been at it for years, and George Costanza still has a giant wallet.

What will get consumers’ juices flowing?

Don’t focus on the payment. It’s only a small piece of the puzzle, and frankly, it’s not broken. Businesses need to take a close look at where the real opportunities exist. If they fail to listen to consumers and observe their behavior, they’ll miss out. Here are a few ideas to leverage mobile technology in order to capture consumer mindshare.

  • Deliver an end-to-end app – Google research indicates that 90% of smartphone shoppers use their phone for pre-shopping activities and 84% use them to help while in the store. Consumers reach for their phones to create shopping lists, research products, look up prices, get coupons, and more. Retailers must embrace this activity and make it more convenient, otherwise consumers will find a competitors app that meets their needs.
  • Personalize the experienceAccording to an Accenture study, 65% of shoppers want to receive offers on their smartphone based on past purchases, while they are in the store. Surprisingly, however, Aberdeen determined that 60% of best in class companies (already using mobile marketing) aren’t yet using customer behavior information to target and segment messaging through the mobile channel. We all know that companies collect a ton of data about us – and we’re generally okay with that – as long as it’s used to offer a more personalized and valuable experience. Here’s a terrific example of one such experience – a public transit organization with a slick mobile app that reward its riders, matching their real-time context (who, where, when, what), their preferences, and interests with highly relevant offers and recommendations – in the moment.
  • Recognize and reward ongoing loyalty – According to Columbia Business School, 48% of mobile shoppers are more likely to purchase in-store, despite equal or cheaper prices online, when part of a loyalty program. While Starbucks doesn’t have online competitors, it certainly doesn’t offer the cheapest cup of coffee on the block. Yet, it racks up approximately 5 million mobile transactions each week from its 10 million mobile users. Talk about loyalty – over 50% of these users make more than 30 purchases a year. No, this isn’t because it’s so much easier to pay by mobile. It’s because they get a free drink after every 12 purchases, along with other exclusive offers.

Sip some sangria, and learn more

Are you interested in these use cases? If you’re heading to Mobile World Congress 2014, I invite you to visit the SAP booth, #6A30. We’ll be showing our comprehensive mix of mobile loyalty, shopping and payments solutions, along with our precision marketing engine that drives all the personalization. We’d love to connect with you in Barcelona to discuss how your company can engage more deeply with consumers to boost revenue and ongoing loyalty.

If you aren’t going to make it to MWC this year, please visit sap.com/mobileconsumer, download the Mobile Commerce Guide – over 40 thought-provoking articles from industry analysts and experts, follow @SAPMobile on twitter, and message me @BrentCohler if you’d like to connect some other time.

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