The Future of How We Pay: What You Need to Know

How often do you think about the credit cards and debit cards in your pocket, or the banking app on your phone, and consider how they could be better — faster, more secure, and more convenient? Chances are, with names like Apple Pay and Square in the headlines, constant press over the latest security breach in a giant retailer’s point-of-sale system, or an upcoming shift to EMV technology in the news, you’ve given it at least a passing thought.

But the payments industry isn’t a tech topic that people follow with the same interest they have in the best new mobile apps, the latest patent Apple’s been granted, or the useful gadgets that are new to the market. So what do  consumers need to know about where the payments industry is going? What are the problems with our current payment methods? What alternatives are available now, and what else will be available in the near future?

Are there new retail models that aren’t yet on the general consumer’s radar? Which innovations have proven successful, and which have yet to prove themselves? How soon will technology be able to replace your wallet? When will the average consumer think that technology can really replace their wallet? How will new payment methods improve security, and what can you do to protect your data? Read on to find the answers to all of these questions and more, and learn about the perspectives of the experts we interviewed on the present and future state of how we pay.


POS malware mayhem: POS and the return of POS

POS malware mayhem: POS and the return of POS

“The U.S. Secret Service and Trustwave researchers identified, analyzed, and named the Backoff POS malware, which has affected at least 1K businesses across the country,” says Karl Sigler, Threat Intelligence Manager, Trustwave. But while the security world is buzzing about Backoff POS and the BlackPOS malware that infiltrated Target last year, other POS malware is afoot, evolving, and potentially surging and resurging at any time.

Will Consumers "Back Off" Brick-and-Mortar After Latest Breach?

Will Consumers "Back Off" Brick-and-Mortar After Latest Breach?

A few weeks ago, the Department of Homeland Security revealed malicious software had infected more than 1,000 retailers' point of sale systems, potentially leaking customers' credit card data to hackers. This malware, known as "Backoff," was highlighted again in Home Depot's announcement early last month. With Target's similar "Black POS" breach in the not-so-distant past, these announcements mark strike after strike against already shaky consumer confidence.

Kohl’s leverages mobile loyalty program to drive customer engagement

Kohl’s is leveraging its new loyalty program, optimized for mobile and Web, in a bid to continue driving customer engagement and build deeper relationships with consumers.

The Yes2You rewards program will offer earning points for every purchase made at or in-store, and will serve as a two-way dialogue to help deliver meaningful experiences, according to the retailer. The rewards program launched on Oct. 6.

“Whether in preparation for mobile payments or not, a well-executed loyalty program can make a big impact,” said Gregg Aamoth, co-founder and CEO of POPcodes, Calgary, AB.

“Loyalty programs serve two major functions: to enable the collection of critical consumer contact and purchase history data and to encourage consumers to give that brand a little bit bigger share of their wallet over a longer period of time.”

Portfolio of incentives
Kohl’s is planning to incorporate a seamless omnichannel experience into its sales strategy, particularly before the busy holiday shopping season starts in full force. Members of Yes2You rewards will earn one point for every dollar spent, and a reward of $5 shopping credit after every 100 points.

The rewards program includes eight savings offers each year, along with a birthday gift for each rewards holder. Customers will also receive notifications of unique opportunities to garner more bonus points.

The retailer offers a “Share” features which enables customers to share their rewards points with family and friends if they choose. Points can only be distributed among members of the program.

Offering a slew of incentives
Offering a slew of incentives
Users can also donate points to Kohl’s Cares, the brand’s charity for children’s education initiatives and health.

Customers may enroll in Yes2You rewards through the Kohl’s mobile app, online or in any store nationwide.

“Rewarding loyal customers is crucial, as according to NRF, 91 percent of shoppers would shop elsewhere if a store offered a promotion or reward,” said Guillaume Lelait, general manager at Fetch, San Francisco, CA.

“Loyalty programs not only reward consumers to make them feel appreciated, but gathers valuable information on consumers which retailers can use to keep the customer loyal by catering deals towards them.”

Mobile wallet
Kohl’s is also introducing its expanded mobile wallet, enhanced to simplify tracking, redeeming and sharing rewards points. Many retailers are going the way of mobile wallets in order to convenience consumers and provide relevant services.

In some cases, mobile wallets and loyalty programs go hand-in-hand.

“With the announcement of ApplePay and Visa Checkout, we will undoubtedly see more retailers utilize mobile wallets as consumers become more confortable using them,” Mr. Lelait said.

“In the case of retailers, the mobile wallet capitalizes on the convenience and immediacy of the mobile device and provides a more personalized and seamless experience for brand loyalists,” he said.

“Mobile apps that simply recreate an online web experience tend to be a waste of money, however by integrating payment features, loyalty opportunities and discounts, Kohls has created a product that will ensure it contributes to overall revenue.”