In the series The inside story x 3, experts from the Plan.Net group regularly explain a current topic from the digital world from different perspectives. What does it mean for Granny, and for an agency colleague? And what does the customer – in other words, a company – get out of it?

While you often find signs saying “No cash, only cards” in shops and restaurants abroad, cash is still the most popular payment method in Germany. In many places, debit and credit cards are not accepted. Up until now, mobile payment has also been difficult in Germany, but that could change this year. With the launch of Google Pay in June and the planned launch of Apple Pay in September, the German market will finally be tapped. So it’s high time for retailers and marketers to consider the impact of mobile payment on the shopping experience.

Mobile payment is still virtually never used in Germany

Grandma, we have to talk. Why are you so determined to hold on to your beloved cash, and so reluctant to use new payment methods? Are you concerned about security? Fear of Internet fraudsters and concern about data protection is likely the major reason why mobile payment has not yet been successful in Germany. Mobile payment has previously been used for small, low-risk transactions, such as grocery shopping or public transport.

Or are you reluctant because you do not yet realise how beneficial mobile payment could be for you? Admittedly, contactless payment using debit or credit cards at the register in bricks-and-mortar retailers has the same advantages as mobile payment: speed and convenience.

Whatever the reasons preventing you from giving mobile payment a chance, you’re not alone. According to a survey by Oliver Wyman (2017), only seven per cent of German respondents have ever paid with their smartphone at the point of sale. The positive news: one third of non-users can imagine using mobile payment in the future.

Mobile payment has been mainstream in Asia for some time

Here in Germany, we are still coming to terms with the “new” option of mobile payment, while in Asia paying by smartphone has long been part of everyday life. Last year, 70 per cent of mobile Internet users in China paid using their mobile phones (CNNIC 2017), which accounted for more than half of all payments in the same period, according to a study by the Deutsche Bundesbank. The leading providers are the instant messenger WeChat (WeChat Pay) and the online retailer Alibaba (Alipay). The use of these two mobile payment apps is simple. To complete a transaction, all you need is a QR code and the app. Simply scan the QR code and pay in the app. Alipay and WeChat Pay not only work in large stores, but can even be used to pay for a melon at a small street vendor.

An even more exciting prospect is that, in the future, you may be able to pay without even needing your smartphone to authenticate the payment process.

In the Chinese metropolis of Hangzhou, customers of the fast-food chain KFC can pay with a smile. The face recognition software “Smile to Pay” takes one to two seconds to create a 3D scan of the face and identify the customer. For security reasons, the order is additionally verified by entering the mobile phone number.

Will developments in the mobile payment sector have an impact on agency work? Probably not any time soon. But in the future it may be possible to book the post-payment page as an advertising space with Google Pay and to play ads that are tailored to the user profile – age, gender, region and consumer behaviour.

How can merchants take advantage of mobile payment for themselves?

Mobile payment has so far been somewhat neglected by bricks-and-mortar retailers. Digital trends such as augmented reality, virtual reality and speech assistants have been seen as much more exciting. But mobile payment is an important part of the digitisation of bricks-and-mortar retail and should not be ignored. Many customers already use their smartphone during offline shopping – as a storefinder, for product research or for navigation within the store with the help of augmented reality apps. Now, the next logical step is the digitisation of the purchase.

When bricks-and-mortar stores support mobile payment as a payment method, they offer their customers two advantages, namely time savings and convenience. With consumers’ increasingly fast-moving and mobile lifestyle in mind, these factors are critical to customer experience and customer satisfaction.

The fashion department store Breuninger is a pioneer of mobile payment in Germany. Breuninger is the first German department store to offer Alipay and WeChat Pay as a payment method aimed at wealthy and shopping-happy Chinese tourists.

Will German shoppers start using mobile payment methods more in future? Only time will tell. In any case, bricks-and-mortar stores should already be considering how to integrate mobile payment into the customer experience.

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