Mobile Payments Terrors for Retailers

Ever since mobile payments first arrived on the scene, the end user had one major fear connected to them: security. Would such a tool be safe, or was it effectively the same as inviting criminals into your bank account? Security’s addressed many of these issues, but new ones arrive regularly. A new report from PaymentSource, meanwhile, revealed that retailers have even more worries than just security alone.

One of the biggest fears for retailers when it comes to mobile payments is the “continent-wide payment outage.” While this may be somewhat overblown—the outage in question struck Visa when it migrated Visa Europe to the worldwide VisaNet concept—some reports suggest that Mastercard had similar problems, and being out for even minutes could cost retailers customers through no fault of their own or anything they can control.

Mobile authentication is proving problematic as well; while the notion of two-factor authentication in payments is all fine and well, the second factor often goes to the same device used to initiate the transaction. That limits the impact of two-factor authentication and may project a false sense of security.

The cashierless store is also proving worrisome, as stores like Amazon Go take full advantage of the mobile payments concept. With much less overhead, and the power of Amazon’s bankbook behind it, widespread launch of Amazon-backed convenience stores could strike markets at any time.

Beyond these included various political and regulatory issues, the rapidly-changing technology landscape that pretty much ensures you’re behind the times by the time you fully get a handle on whatever just came out, and the out-of-left-field arrival of Alipay to pretty much everywhere.

While security is no less a concern for the retailer—after all, the last thing anyone wants is to go out to eat and get their identity stolen—it’s only one of a series of concerns, any of which by itself could send the retailer out of business. And yet, lurking behind each of those fears is the inevitable fear that failure to offer mobile payments could well send customers running to competitors.

There’s a lot for the retailer to be afraid of, but knowing it leaves them better positioned to address these fears and develop competitive advantages. That alone is worth a closer look at the terrifying landscape of retailer mobile payments.