3 Major Ways Mobile Payments Will Change the Way You Shop

The physical retailer is making a comeback. The online shopping revolution left many physical retailers reeling. Mom and pop shops around the globe closed as people explored convenient and less expensive online alternatives. Can anyone blame them? For non-urgent purchases, online shopping is the superior experience.

The latest development in payments might turn the tables. For the past few years many companies have started developing mobile payment solutions. Whether in the form of software or hardware that connects to a smartphone, mobile payments allow vendors to process credit card payments from any mobile device. The result: a new era of shopping.

Just as online shopping changed the ways we buy goods and services, so will mobile payments. The difference is that while online shopping allowed us to accomplish at home what we previously accomplished at a store, mobile payments will allow us to do more back at that store.

1. The end of checkout lines

Perhaps the greatest pain of visiting a store comes at the end. Even if you find everything you want, you still have to wait on line to check out. At some times that’s not a big deal. But during peak shopping hours you’ll have to wait behind a number of people before you can leave. Anyone who has ever visited a Walmart or other big box retailer mid-day on a weekend knows that any number of conditions — a slow cashier, a disputed price, a disorganized customer — can make for a long wait at checkout.

We have to wait on these checkout lines, because point-of-sale (POS) systems are large and mostly immovable. But that’s the old way. Companies such as WePay have worked hard developing virtual terminal software that replaces those large, clunky cash registers at the fronts of every store. Stores can load this software onto mobile devices, which gives them any number of virtual registers. The potential for expediting checkout is enormous.

Imagine finishing your shopping and having a store employee come up to you, scan your order, and take your payment right on an iPhone or iPad. Or, better yet, you scan the order on your own iPhone and check yourself out at the end. Many grocery stores in the US already have programs like this. Bringing it to big retailers such as Walmart and Target can change the game for consumers who otherwise might have shopped at home.

2. Satellite shopping

Every couple of months my wife and mother-in-law take a trip to an outlet mall. It’s about a 90-minute drive each way, but they make a day of it. Why? Because there are plenty of outlets

there that don’t have any presence around us. Their merchandise might be in some stores, but it’s typically far more expensive than you’ll find at the outlet location. And so they spend a full day, not to mention a tank of gas, visiting these stores.

Brands prefer the outlet model, because it allows them to set up shop cheaply. Outlets are in more remote areas than other malls, because they are destination shopping experiences. You go there because there are so many vendors and brands selling directly. The cheap retail space allows these brands to sell merchandise at a discount. Mobile payments, combined with one other recent trend, could help bring that same cheap shopping experience to higher volume areas.

Storefront is a company that helps retailers find short-term space. Vacant retail space is at an all-time high, so landlords are much more accommodating for short-term leases. Storefront helps connect these landlords and brands that could use the retail space. Brands that utilize mobile payments can set up shop cheaply. They can bring in merchandize, check out customers with smartphones, and realize the benefits of high-volume shopping areas. These temporary satellite locations can help expose brands to customers who don’t want to spend three hours in the car.

3. More niche vendors

The internet has given rise to many niche vendors. Sites such as Etsy promote hand-made, niche products. People flock to these products, because they’re different than the mass-produced trinkets and clothing you see at most major retailers. Yet Etsy stores are at a great disadvantage. When you want to buy a TV or a smartphone or any other mainstream item, you can go see it at a physical store before you buy it online. With Etsy you’re buying based on pictures and description.

For most Etsy vendors, selling in-person is impractical. They’d need a POS system, for starters, which can be expensive. They also need space to sell. Mobile payments takes care of the POS angle. Niche vendors can set up shop in traditional retail space, using an agent such as Storefront, or they can set up as vendors on street corners or at trade shows. In any case, the ability to accept credit cards, rather than cash only, gives them many advantages that they previously did not possess.

Mobile payments makes in-person shopping more convenient for the consumer, and lowers overhead for the retailer. The result is an enhanced in-person shopping trip, something that has been diminishing over the last decade thanks to improved online shopping experiences. Since mobile payments are still in their infancy we might not see an impact immediately. But as these payment solutions spread far and wide, we’ll see more physical retailers make a comeback.