By Ben Carsley, Writer/Editor
The technology behind NFC alone is not enough to drive consumers to use mobile wallets. David Marcus, President of PayPal, said so. Karen Webster, CEO of Market Platform Dynamics, said so. In a way, even Apple said so by opting not to include NFC functionality with the iPhone 5.
If true, that’s trouble for Isis: a mobile wallet largely based on NFC technology that, after several delays, finally launched in Salt Lake City, U.T. and Austin, T.X. in late October.
So when I attended a “BIG !dea” exhibit with Isis at NRF 2013’s tradeshow “Retail’s BIG Show” this week, I wasn’t quite sure what to expect. But after listening to those on the discussion panel, seeing the interest Isis generated at the show and speaking with an Isis representative in attendance, it’s pretty obvious to me that there are plenty of people left who still believe in Isis’ potential.
The session, titled “Mobile Commerce: Future of Retail” consisted of Ben Craner, CMO for Cafe Rio, Roger Miller of the Larry H. Miller Group, and Rick Kanemasu, a strategy consultant with Coca-Cola’s Vending Technology Strategy decision, and was moderated by Susan Reda, editor of Stores Media. Jim Stapleton, chief marketing officer at Isis, was also in attendance, and took some questions at the end of the seminar as well.
Craner, Miller and Kanemasu all work for companies that have partnered with Isis, so their accounts are hardly unbiased. That being said, the reviews they gave of the mobile wallet were, for the most part, fairly glowing, and revealed some interesting industry opinions on Isis’ potential as a payments tool.
Kanemasu said Coca-Cola is working with Isis to pilot a My Coke rewards card in Austin, and will give away 30 My Coke reward points for consumers who use the technology to buy from an NFC-enabled vending machine. He spoke of the growing ubiquity of mobile payments, and referenced a time in the near future where people will rely primarily on mobile payments to secure their goods.
“My kids are 11 and eight, and I’m not sure they’ll known plastic [payments],” he said.
Miller, whose company operates Megaplex Theaters through the western U.S., noted that the cost to accept mobile payments is very low, and that seeing a return on investment would take a modest level of adoption.
“Contactless and mobile go hand-in-hand … and starting with contactless is just the first step,” Miller said. “If 5 percent of the 52 percent who are using cards for movies switched to contactless, it’d recap the investment.”
While the sentiments expressed by Kanemasu and Miller certainly offer optimism for Isis, it was the enthusiasm for the technology expressed by Craner that really got my attention.
Contrary to what we’ve heard so many times, Craner said that contactless technology itself was driving his customers to adopt the NFC payments method, and that it was a trend he saw continuing in the near future.
“People asked us about Isis right away,” Craner said. “It’s sort of going nuts, to be honest, and I couldn’t be happier.”
Craner said his company has held events such as an RFID code Easter egg hunt to help raise awareness for the technology, and that he’s seen customers in his store ask others around them about NFC technology when they see it in action.
“It creates even more groundswell,” he said, pointing out that for a company where turnover is key, any speed that NFC can add to the checkout process is welcome.
“A change in 5 percent throughput can be thousands of dollars for a company like us,” he said.
Craner pointed out that around 65-70 percent of Café Rio’s current transactions are done via credit card, and guessed that within the next year, around 10 percent of those transactions would turn mobile.
Plenty of caveats apply here, and anyone familiar with NFC technology will be quick to point them out. These are all Isis partners speaking, they’re speaking from a limited sample size in a specific part of the country, and except for the case of Craner, they’re more talking about what Isis could do, rather than what it’s doing already.
But when I spoke to Sergio Pineda, senior manager at Isis, after the seminar, he pointed out that the reactions validated what Isis has believed all along: consumers can clearly see the benefits of mobile payments.
“I think NFC is really starting to gain a lot of momentum for a couple of reasons,” Pineda said. “For a consumer, what that means is, I don’t have to carry coupons, I don’t have to print something out. Basically all of that resides on the phone, which increasingly, as we all known, a phone is really a device that everyone has with them, so it really becomes a convenience factor. And I think that convenience factor is what is going to continue to drive momentum, awareness, as people see others using contactless as a form of payment.”
When Isis finally launched in October, some of its immediate views were less than promising. But three months later, Pineda said that the pilots are preforming “as we’ve expected,” and while he couldn’t share any of Isis’ plans for expansion, did describe the strategy the company is taking right now.
“We’re collecting a lot of insight, and we’ll reach a point where we say, ‘ok, we’ve done enough collection of insight, now let’s take a step back, reflect and figure out what it means going forward,’” Pineda said.
“They key for us right now is to continue to see adoption and usage of the wallet, and to learn from the customer’s experience, but also to learn from the merchant’s experience as we think about what all this means for us.”