Photo Source: WCPO Cincinatti
The future of mobile payments is contactless and frictionless. There really isn’t any doubt about how things will play out at this point. It is slow in being realized here in the United States, but the end is inevitable. People are eventually going to use their smartphones for most purchases. The younger a person is, the more likely they will be to embrace using mobile payments now.
It has taken time, but most retailers and banks have come around to the fact that the best way to do this is to go with NFC readers, which allow customers the choice to use Apple Pay, Google Pay, Samsung Pay and others. When you total them up, these platforms cover most smartphones that customers will have. People will still be able to use Chip and PIN credit cards, if they choose, for the foreseeable future. However, contactless is where the market is heading.
The big problem right now is with the holdouts. Remember CurrentC? Probably not, because it was basically DOA. This was an attempt to head off NFC-based mobile payment solutions with a QR Code solution that just couldn’t cut it. Walmart is on their second attempt since then with a new app and in-house service called Walmart Pay. Now this week, we have a report that Kroger will also be going it alone with their own in-house solution called, you guessed it, Kroger Pay. Yawn.
Kroger and Walmart are making the same stupid mistakes here. First, they are going it alone, rather than using the growing standards in mobile payments. These are additional apps that you have to set up and fool with and that add friction to each purchase when customers have made it clear that they prefer to use the systems that are built right into their phones. Secondly, both Walmart’s and Kroger’s systems rely on QR Codes. Again, the future of payments is contactless and frictionless. QR Codes are NEITHER. You have to open an app, futz around and get to a QR Code and then scan it.
This is a step backwards for consumers that exists for one reason- to get more of your data. I understand that both Walmart and Kroger are under threat from Amazon and that data and analytics are the key to improve what they are doing to better serve customers and keep them coming to their stores, rather than going online. Kroger already does this with its Kroger card and app, so its not like they are flying completely blind.
For clarification, we have a large Kroger Marketplace in my small suburb and I actually love shopping there. The layout is good. The employees are friendly and helpful. It’s a great local business. I also have absolutely no issue with the Kroger card/account system for discounts and rewards. I haven’t used an actual card for this in several years, as I just enter my wife’s phone number as my ID. The rewards and discounts are solid and we get what I find to be a very nice discount on gas at their Fuel Center. I have no complaints with any of this.
However, as I look to start using Apple Pay more and more, I just find it ridiculous that large companies like Walmart and Kroger persist in going against the grain. In the case of Kroger, they are already getting my data through the discount card. They are getting my money in LOTS of grocery purchases. I flat-out refuse to use Kroger Pay, with its QR Codes and inherently inferior design. Hopefully, Kroger will see the light when Kroger Pay doesn’t take off and embrace the future.
In the interest of full disclosure, my wife is actually the Front End Manager at our local Kroger Marketplace. One of her jobs over the last couple of years working at Customer Service has been to educate customers on how to use the Kroger app and how they can get to the digital coupons and sale items. She has been a big champion of the app and is always willing to help someone out with it when asked. However, when I talked to her about this article, my wife told me that she also has to field a LOT of requests and questions about Apple Pay and why they don’t support it. I was actually a little surprised to hear that, but it is just more proof that contactless payments are what customers, especially younger customers, want.
Come on Walmart and Kroger. Get with the program and join the rest of us in the future.