Life During Mobile Payments

Subscribe to The Financial Brand via email for FREE!With apologies to David Byrne and Talking Heads (not The Talking Heads), here are some revised lyrics to their song Life During Wartime:

Heard of a phone that’s loaded with payments
Packed up and ready to go
Heard of some pay sites, out at the Safeway
A place where nobody goes.

Transmit the payment, to the receiver
Hope for a transfer some day.
I’ve got three wallets, all linked to Visa
You don’t even know my real name.

This ain’t no party, this ain’t no disco
This ain’t no fooling around.
No time for swiping, or EMV love
I ain’t in the line anymore.

***

Yes, I know–I’ve missed my calling in life as the Weird Al Yankovic for financial services. But just as I may be living in la-la-land thinking I could be Weird Al, some of you are living in la-la-land envisioning how mobile payments are going to work in the future.

On a recent episode of Brett King’s radio show, , Shel Israel and Brett got into a discussion about mobile payments and how, in the future, we’ll be able to just walk out of the store without experiencing the “friction” of a line at the cash register, because our phones will know what we “bought” and will just charge the transaction to our account.

Upon hearing this, I tweeted:

“And what stops any idiot from just walking out the door of the retailer without paying?”

***

Sorry to bring some of you back into the realm that some of us call REALITY, but this is simply not going to happen. Comparing an Uber experience to shopping (and paying) for physical products in a store like Target is ludicrous.

The friction point known as the “checkout line” isn’t there simply to take your money. It’s to ensure that you actually pay for what you walk out the door with. It’s known in some circles as “security.”

In a world of ubiquitous mobile payments, sure, we could just use our mobile payments to scan the UPC or QR code on a product, stick the product in a bag, and walk out the door. But what’s going to stop some people from putting things in their bag without having first scanned it?

***

OH! WAIT! I KNOW WHAT WE CAN DO!!!

We can have a security guard stand at the door and ensure that anybody who walks out with a bag has actually scanned and paid for that product!

BRILLIANT IDEA! Ten times better than having to wait on line at the checkout counter.

***

And how is it going to work when I decide that I don’t want one of the products that I scanned and paid for? How is the store going to ensure that I really put that product back on the shelf?

“Um…yeah…good point, Snarketing Boy.”

And what if, for some reason, the “return” isn’t processed correctly, and the transaction shows up on my statement? How am I going to prove that I really didn’t walk out the door with the product?

“Uh…that’s not going to be a problem, Snarketing Boy, because mistakes never happen in the world of retail.” Oh, ok.

***

Bottom line: I really have missed my calling in life. You know how much easier my life would be if I could just write books and go on radio shows and speculate how great life could be as a result of new technologies–without having to deal with the realities of implementation?

Ron ShevlinRon Shevlin is Director of Research at . Check out more of his ideas and research on Cornerstone's And don't forget to follow him on Twitter at

This article was originally published on February 19, 2015. All content © 2018 by The Financial Brand and may not be reproduced by any means without permission.

Comments

  1. I did answer this on the show Ron… 🙂

    BK

  2. Ron Shevlin says:

    BK: Well….not really, You implied that someone walking out of the store would be automagically be charged for what they walked out of the store with. But that answer doesn’t address some of the concerns/situations alluded to in the post.

    And I don’t know if you’ve been shopping recently, but applying coupons and discounts to purchases requires a PhD. How is that going to happen?

    More questions than answers at this point, Brett.

  3. Brilliant post. Reminds me of many “While You Were Out” columns in FORTUNE by Stanley Bing. I’ve asked this “But what’s going to stop some people from putting things in their bag without having first scanned it?” question ever since I heard about mobile self-service checkout solutions 4-5 years ago. Not a single solution provider has given me an answer so far. For the first time, I’m seeing the semblance of an answer now. But, like you say, it raises more questions than it answers: (1) Won’t this step simply shift the queue from checkout to security desk? (2) Without a barcode scanner at the security desk, how can the security guard ensure that the item in my bag is the item I’ve scanned (and paid for)? For example, I can scan and pay for a $1 item and put it back in the shelf and pick up a $100 item and put it in my bag without scanning and paying for it – a simple hash total check will not catch this fraud.

    Even talking about UBER, the way it works in India, the money is pulled out of my mobile wallet even before I see the fare. I’m sure someone will claim that GenY and GenZ want payments to be invisible and don’t want to participate in it and all that. But, removing money from my wallet without my explicit consent sounds like pickpocketing. So, I decided to stick with UBER competitors who let me pay by cash.

  4. Ketharaman: In the past 24 hours, I have:

    1) Talked to a call center rep who promised to email me a form I needed. I never received the form.
    2) Chatted w/ a service rep from Verizon who told me my matter was being escalated to the Tier 2 team, and that I would receive a call from a supervisor “within the hour.” That call never came.
    3) Talked to a VP at ETrade about $600 in accrued interest that ETrade insists was incorrectly posted to my account.

    If you–or any retailer, or mobile payments pundit, for that matter–think I’m going to trust that retailers and merchants are going to get it “right” regarding the automagical charging of the RIGHT products that I walk out of the store with at the RIGHT price (i.e., after applying the eCoupons on my magical smartphone), then you (or the retailer or pundit) are doing more drugs than an arena full of Grateful Deadheads.

    Frankly (my dear), I don’t give a damn what Gen Yers want in a payment experience. Let them learn the hard way that no matter how poorly they think the existing world of payments works, the shift to cardless, cashless, FRICTIONless world of mobile payments won’t be a reality until they’re MY age.

    Sorry, Brett. This is just going to have to be something we agree to disagree about. It is simply NOT going to happen by 2020.

  5. With RFID, walking out of the store is possible. RFID readers can “read” all the purchases in your buggy and charge your checking account with it reads your ID fob on your keychain which you setup with the store before hand. These same RFID tags tell the store what is purchased so inventory can be tracked. And if you pick something up and change your mind 2 isles over, the RFID tells the store where it is and where it needs to go. This is nothing new and could have been done years ago and today.

  6. Adam Emrick says:

    Though it’s a stretch. Here’s how it could work:

    New “barcodes” could transmit using some form of radio frequency or NFC to a scanner as you walk out. If the person scanned/paid for the item with their phone the transmission would not trigger alarms. If the person didn’t scan/pay with their phone and is simply trying to steal the item, the transmission could send an alarm.

    The technology isn’t there yet, but who knows…it may be possible one day. The cost may take mass adoption a while, but on high end stores, such as jewelers or designer clothing, it may be adopted more quickly. No need to invest in multiple registers or pay multiple cashiers. You could run your store with a one person that could act as a security guard/greeter and be cross trained in case crap hit the fan and the scanner didn’t work.

    Plus this technology would make doing inventory a breeze and save tons of money in the process. Just wave an RF scanner over the items and it would automatically tell you what’s there. No need to pay crews to come in and count and would eliminate/reduce the human error.

  7. Nate/Adam: Thanks for commenting.

    Here’s another way this could all work….

    Don’t know where you guys live, but in the fall, here in New England, it’s apple picking time. Most of the places I’ve been too make you buy your bag BEFORE you pick the apples.

    Check out this video that was tweeted by Aaron Press:

    What’s the problem there? Shoving slimy meat packages into your coat. Gotta get a shopping bag! To get a bag, you’d have to authenticate your payment credentials.

    Still plenty of issues regarding security control, but this could be one way how it could work.

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