While it is clear that end users, mobile service providers, processing networks, mobile device manufacturers, marketing and advertising networks could benefit, it still is generally unclear what the quantifiable benefits are for retailers, who face a need to invest significantly in payment terminal systems.
That suggests a major conclusion about what it will take to drive retailer interest. It long has been the case that if consumers massively indicate a preference for specific payment modes, that retailers will embrace those preferences to avoid losing business to other outlets. So if the direct value proposition for retailers remains murky, then the ecosystem will have to entice large numbers of consumers to prefer and then demand support for the new features.
In the mid-2000s, Visa, MasterCard and American Express all introduced contactless payment cards that consumers could tap against a payment terminal to complete a transaction. Years later, the number of merchant locations that accept such transactions number 140,000 out of an estimated 11 million overall locations.
Today, the card brands are working toward putting tap-and-pay capabilities, along with offers and coupons, into smartphones. But retailers would face expensive upgrades to their payment systems without assurances sales will follow. A compatible payment terminal might cost between $400 and $500, experts say.