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Jonathan Camhi
Jonathan Camhi
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How to Change Consumer Behavior to Adopt Mobile Payments

Two mobile payments ventures, MyCheck and PayPal, explain how they think they can hook customers on mobile payments.

Consumers have been slow to adopt mobile payments at the point-of-sale, but some providers are trying to change that by building new consumer payment habits through specific use cases.

Representatives from two mobile payments providers - MyCheck and PayPal - talked yesterday about their attempts to build such consumer habits during a meeting with reporters. MyCheck, which enables restaurant customers to split their bill and pay it from their smartphone, has partnered with PayPal to integrate their experience into the PayPal app and expand the availability of mobile payments among restaurants in New York City.

Representatives from the two companies said they expect the value proposition of being able to save consumers time when it comes time to pay their restaurant bill will entice many consumers to use mobile payments when they eat out.

[See Related: Low-Value Transactions: A Mobile Payments Dilemma]

“If you associate MyCheck with shaving time off of your restaurant experience, then the next time you’re in a rush, you’ll find some place that takes MyCheck,” Frances Zelazny, MyCheck’s EVP of Americas, said.

That value proposition will also be attractive to restaurant owners, said Craig Olson, who leads PayPal’s efforts to drive mobile payments adoption among small businesses in New York City, which is one of PayPal’s test markets for mobile payments at the point of sale, along with San Francisco and Austin. Being able to cut down time on paying the bill would be a great offering for restaurants in the Theater District, where customers are often rushing out of the restaurant to make it to their show, he noted.

“In one year a tremendous number of restaurants in the Theater District will be offering the ability to pay at the table [with the mobile device]” Olson predicted.

PayPal has been using “activation ambassadors” at some of the brick-and-mortar retailers that accept PayPal payments in stores to inform customers that they can pay at those locations with their PayPal app, Olson shared. These ambassadors encourage customers to download the app and use it by offering discounts at those locations if they pay with PayPal, he added.

But getting more brick-and-mortar stores to offer mobile payments is also a key part of forming the consumer habit of taking out their phone to pay, MyCheck’s Zelazny added. Mobile payments have to become available at more locations if that behavior is going to become a habit for customers. “It becomes a habit when you can do it any time, anywhere,” she explained.

That kind of wider adoption among merchants and customers will likely take more partnerships like the one between MyCheck and PayPal. “You can have all the infrastructure [in place], the most users, the best technology in the world. You can have the best customer experience. That’s still not enough. You have to be able to combine all those things and connect all those dots,” said Tal Nathanel, MyCheck’s CEO.

Jonathan Camhi has been an associate editor with Bank Systems & Technology since 2012. He previously worked as a freelance journalist in New York City covering politics, health and immigration, and has a master's degree from the City University of New York's Graduate School ... View Full Bio

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User Rank: Author
11/21/2013 | 1:24:33 PM
re: How to Change Consumer Behavior to Adopt Mobile Payments
This is the main issue around mobile payments: there's a lot of buzz and all this talk about how convenient they are, but consumers don't see a compelling reason to ditch their plastic cards.
User Rank: Author
11/20/2013 | 8:59:32 PM
re: How to Change Consumer Behavior to Adopt Mobile Payments
I've noticed that people are more likely to use mobile payments if they receive a benefit other than convenience. Starbucks offers rewards (discounted drinks, music downloads, etc.) if people frequently use their Starbucks "card," which is located in the brand's app. I think if restaurants offered discounts for using MyCheck, the app would be a hit. Though I have to say, I'd probably try it without a rewards incentive - it would make splitting a large restaurant bill much less annoying.
User Rank: Author
11/20/2013 | 7:54:41 PM
re: How to Change Consumer Behavior to Adopt Mobile Payments
They're banking that by finding some solution to everyday problems - in this case having to wait for your bill at a restaurant - they'll be able to change consumer behavior. They do have to "train" customers to start thinking differently about how they pay. A lot of small, quick, low-value transactions (like a coffee at Starbucks) that would be perfect for mobile payments are usually conducted by cash in the U.S. That's definitely a habit that they will have to change if they're going to get consumers to use mobile payments.
User Rank: Author
11/20/2013 | 7:40:34 PM
re: How to Change Consumer Behavior to Adopt Mobile Payments
I don't know about "training" consumers to pay or use devices, accounts or whatever in a particular way. I've heard that one reason for the slow uptake of digital wallets is that it is a technology in search of a problem. The most effective apps -- or financial services offerings -- solve a problem or help customers do something more easily. These companies claim that is what they are doing, but it's not clear to me they are actually offering something that consumers want.
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