A study conducted by US university students
has concluded mobile payments are too costly to implement in
retail.
The American students presented their findings
at the National Retail Federation’s (NRF) annual Convention and
Expo, having won a competition sponsored by the NRF Foundation and
American Express.
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The student’s findings suggested that at
present, the costs of implementing mobile payments into retailer’s
point-of-sale systems would not be viable. They said retailers
will wait for smartphone manufacturers to begin to implement
the required hardware into their phones first in order to save on
infrastructure costs.
“The students believe the technology for the
smartphone will very soon enable them to [make payments] without a
big input of cash from the retailer” said Jerry O’Brien, executive
director at the Kohl Center for Retailing Excellence at the
University of Wisconsin, Madison.
The technology required for contactless
payments is known as near-field communication (NFC). The students
calculated that the cost of implementing it into each checkout
would be approximately $200. They also noted that only one-sixth of
smartphones would have NFC chips by 2014.
Industry insiders widely accept the view but
also indicate that there are other options available. “NFC is only
one way you might use to make connections at the point of sale,”
said Richard Crone, chief executive and founder of Crone Consulting
LLC.
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By GlobalDataOne of the companies the students based their
findings on was Marconi Pacific, who said retail applications
built for Apple iPhones and phones that run Google Inc.’s Android
software would still reach only approximately 9% of all mobile
phone users in the US. Furthermore, only a fraction of those phones
would be able to use NFC technology.
