Black Friday: Mobile payments sputter at the physical POS
At least one industry executive believes erratic support from U.S. retailers for in-store, proximity-based mobile payments likely contributed to low use among consumers as the holiday shopping season sprang to life on Black Friday.
Cayan, a Boston-based payment technology company, revealed this past week that smartphone payment apps accounted for just 1 percent of its retail partners' 1 million-plus in-store payment transactions on Black Friday.
While that figure is up from 0.6 percent last year, Cayan believes more in-store, proximity-based mobile payments should be happening with its merchants and elsewhere.
"Nearly every adult in the US has a smartphone capable of mobile payments, but retailer support for mobile payments is spotty at best," Dominic Lachowicz, senior vice president of engineering at Cayan, told Mobile Payments Today in an e-mail.
Lachowicz pointed to Cayan's own, small experiment with retail partners that showed if merchants displayed a "splash screen" ad on a POS device promoting Apple Pay acceptance, consumers were more likely to use the mobile-payment system.
"We've demonstrated that showing a customer a small ad/logo/splash screen/whatever, can cause a dramatic increase in mobile payments usage, but customers' payments preferences quickly return to baselines once those ads are removed," he wrote. "Today's customers have to carry both a smartphone and a wallet, and it's likely that retailers' patchy/inconsistent support for mobile payments is causing customers to fall back on muscle memory once those reminders are removed."
Despite the less-than-stellar numbers for in-store, proximity-based mobile payments, Cyber Monday set a record for mobile-based remote payments.
Overall, consumers spent $6.6 billion online to start the week, a 17-percent increase from 2016, according to Adobe Systems.
Mobile purchases accounted for some $2 billion of those sales, a new record in the U.S. Consumers spent some $1.4 billion via smartphones while the remainder came from tablets.
As for the rest of the holiday weekend, consumers continued to show an increasing penchant for using their smart devices to make remote purchases from the dinner table on Thanksgiving through Cyber Monday.
Thanksgiving Day saw $2.87 billion in online purchases, up 18.3 percent from $1.3 billion last year, according to analysis from Adobe Systems.
Black Friday saw $5.03 billion in online sales, up 16.9 percent from $4.3 billion in 2016.
Adobe Systems based its data on 1 trillion online visits to more than 4,500 retailers.
Adobe Systems said mobile devices on Black Friday accounted for 54.3 percent of page visits and 36.9 percent of sales. Actual smartphone use accounted for 44.6 percent of visits and 26 percent of sales.
Such a large percentage of remote purchases could help explain why First Data merchants saw in-store sales drop 4 percent from last year to 71 percent on Thanksgiving Day and Black Friday.
First Data's numbers are based on the POS activity for 1.1 million brick-and-mortar merchants where it processes transactions.
Will Hernandez has 14 years of experience ranging from newspapers to wire services and trade publications. Before becoming Editor of MobilePaymentsToday.com, he spent two years as the content manager for PaymentsJournal.com, a leading payments industry news aggregator and information hub published by Mercator Advisory Group. Will spent four years covering the payments industry as an associate editor for multiple publications in SourceMedia's Payments Group based in Chicago.