Page 30 - Pay Magazine

digital money
Igniting Payments Change
app-based ordering, Reynolds wrote in a February issue of Pay Op-Ed. He cited the example of Swedish burger chain Max, which reports that half of all sales now come from digital channels, in- cluding self-checkout kiosks and the Max mobile app.
“Digital channels are attractive because the customer experience is superior and these channels produce higher average order sizes for Max. The app and other digital channels have gone from being a support function to being the chain’s primary channel.”
Several chains are getting in on the action, including McDonald’s, which began testing order-ahead and in-app payments in March
at 29 California restaurants.
The hamburger chain joins QSRs Starbucks, Chipotle, Dunkin’ Donuts, Taco Bell and Chick- l-A, to name a few.
“Digital commerce is a real cata- lyst for change,” says Rick Oglesby, president AZ Payments Group. “Digital payments are very much going mobile. Consumers aren’t dying to change the way they pay in checkout lines, but where they can pre-order and skip the line altogether or, even better, skip
the store entirely, adoption is much stronger. That’s where the real game changers are.”
Although retail lags other sectors in app commerce penetration, First Annapolis is expecting this
to shift “as apps can serve as a powerful platform for self-checkout as well as integrated loyalty.” For example, Walmart is adding compli- mentary grocery pickup in several U.S. markets, an order-in-advance model ideally suited for the mobile app. “We expect that evolution of integrated commerce, loyalty and payments to eventually accelerate growth of app commerce within the retail sector (as observed today at Starbucks),” noted Reynolds.
In-app commerce could become even more important in Europe, where the implementation of stronger authentication rules (currently in nal draft) limit online transactions to €30 (US$32.27) before they trigger two-factor authentication. As Reynolds pointed out, “creating frictionless use cases for two-factor authentication will be challenging; however, biometrics authentication (‘something you are’) on a smartphone (which also can hold an encryption key, or ‘some- thing you have’) is a compelling option. We expect smartphones to become the platform of choice for payment authentication and for apps to play a key role in enable- ment of payment use cases.”
Making the Most of the
Mobile App
While retailers look to their apps as a commerce platform, Minneapolis- based Digiliti Money (formerly Cachet Financial Solutions) believes the mobile app—when done right —is poised to be a game changer for prepaid in terms of unlocking loy- alty and ghting churn.
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Digiliti Money upgraded its platform, so customizing programs with di erent features is as easy as customizing the user interface.