Mobile Payments in the C-Store

PMAA Journal – Americans don’t mind paying for the things they want, but they are increasingly insisting on deciding how they pay for them.

There are two underlying criteria c-store retailers want in a payment system: first, something that is convenient for both the customers and retailer; second, a payment method that does not unfairly add cost to the retailers,” explained Steven J. Montgomery, president of b2b Solutions, LLC in Lake Forest, Illinois.

Retailers don’t mind paying credit card and debit card fees, Montgomery has found. “They mind the fact the fees are seen as too high. The only reason the noise regarding this has calmed down some recently is because the cost of fuel has dropped and margins have increased. It is still a big issue for the industry.”

“A convenient and frictionless mobile payment experience is going to be a differentiator with increased significance in the c-store and petroleum space over the next two to three years,” said Perry Kramer, vice president and practice lead for Boston Retail Partners. “In this highly competitive space, Apple Pay, Android Pay, Chase Pay, Samsung Pay and the many other emerging mobile wallets are going to significantly continue to grow in usage and reach a tipping point for customers in a space were margins are tight and price is often differentiated by 2 to 3 cents.”

The importance of speed, ease of payment, and convenience at the pump and in the store are going to increase in the c-store area faster than many other retail formats. Much of this, Kramer explained, is driven by the significant number of under-35-year-old customers in this retail segment. “This demographic is on the go, and in almost all cases, the fuel purchase is a mandatory purchase, not a discretionary one. This consumer demographic expects convenienceand rewards for their loyalty.”

Any time one of these mobile wallets can be tied to a cash-back or loyalty program, while remaining frictionless, it significantly increases the chance that the consumer will remain loyal to that brand, he noted further. “Once we get them hooked with faster checkout and compelling rewards, they are more likely to increase both the number of visits and the spend per visit.”

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