the new payment way: frictionless
The Up-and-Coming Digital Payment MethodIn the past several decades, credit cards have become as ubiquitous as cash in a customer's wallet. Now, the digital revolution which has swept the business world is set to create a third major player in the payments game - the frictionless one. This up-and-coming digital method made possible by the technological advancements of QR codes and Near Field Communication (NFC) is about to change it all.
The change
comes with the rise of mobile and similar payment options already available to
consumers in all corners of the world. Mobile payments alone are projected to
reach 1 trillion U.S. dollars by 2019.
Frictionless Payment, Frictionless Life
The premise of frictionless payment is simple: enter a bookstore or a coffee shop, take a book or a cup of ready-made coffee, and then simply scan the QR code with your smartphone to charge the item to your payment account.
Examples
abound, and include some commerce giants such as Amazon or Uber.
Brick-and-mortar Amazon Go stores allow customers to simply walk out with items
they want to purchase while frictionless payment takes place via their mobile
phones as they leave the location.
Uber's
customers link their credit card accounts to the service's mobile app which
tracks the rides they take and then automatically charges the fare to their
account as soon as the ride is over. Alibaba's Alipay Wallet platform can boast
over 520 million users who utilize its 'scan QR code at checkout to pay'
approach; Alibaba also partners with Hema Supermarkets, allowing their
customers to frictionlessly pay for groceries and fresh food.
Personalization of Customer Experience
Customer
experience is becoming an increasingly important factor in shopping, with
people looking for ease, convenience and an enjoyable experience on their way
to a successful purchase. Frictionless payments are doing their part for this
cause through personalization: registering purchases and customer preferences,
which can then be used to offer them personalized product pages, discounts and
offers. This data can also be used to customize rewards systems and perks via
loyalty programs as well as aid brick-and-mortar staff to offer a better
service to their customers.
Frictionless Future
Technology is moving towards allowing payment using 'wearables', meaning paying via items ranging from clothing to watches to jewelry that contain frictionless payment hardware.
But the
technology that allows frictionless payments has uses far beyond it, as in, for
example, Singapore, which utilizes biometric passports for all its citizens,
eschewing manual checks and stamping at immigration checkpoints for automated
passport and fingerprint scanners. This also benefits non-Singaporeans,
reducing queue lengths at airports and checkpoints.
Frictionless
payments have not only almost conquered e-commerce and retail, but are now
moving toward offering smoother and efficient services to customers in other
industries, ranging from healthcare to education.