Mobile payment – using smartphones to pay for everything from air fares to hotel bills and cups of coffee – is coming. Is your company ready? Probably not, according to a new white paper from AirPlus International and the Association of Corporate Travel Executives.
Mobile payment is likely to hit the corporate market in 2013 and accelerate sharply starting in 2014. But more than half of travel managers who responded to an ACTE poll said they are “beginners” when it comes to mobile payment knowledge. Only 6 percent called themselves “experts.”
It’s coming . . . it’s already here
“Mobile payment is coming whether you are ready for it or not,” said Spencer Hanlon, executive director of marketing for AirPlus, speaking at the recent ACTE Global Education Conference in San Francisco. “It is going to be big. Very big.” In fact, mobile will account for $50 billion in payments by 2014, Hanlon said.
Millions of consumers already use mobile in Asia, waving their phones over a contactless terminal to make and verify payment for virtually any transaction. Similar systems combining a mobile wallet and near field communication (NFC) are appearing in Europe and the U.S.
How does it work?
The mobile wallet is simply an electronic version of a plastic credit card, debit card, prepaid card, or any other payment mechanism loaded on the user’s phone. NFC is an electronic reader that can communicate with the mobile wallet or other payment device within a few inches of a reader.
In the U.S., travelers from Atlanta to San Francisco wave smart cards to buy public transit tickets. In Hong Kong, mobile began as a public transit card and has continued to expand. Tens of millions of residents and visitors wave their Oyster Cards to buy newspapers, groceries, fast food meals and other purchases every day.
“Instead of paying with a dumb piece of plastic, your travelers will be paying with a tiny computer called a ‘phone’ that knows where they are at all times,” Hanlon said.
Improved compliance . . .
An advantage of using mobile is that “you can build in compliance at the point of sale,” Hanlon said. “You will get real time data, and you will be able to use location-specific travel policy.”
But this works only if the company is ready to access and use mobile data.
. . . and convenience
U.S. consumers are already adopting mobile payment, according to the white paper. Corporate travelers will start using mobile next year out of sheer convenience.
Instead of digging for a credit or debit card, running it through the merchant’s point-of-sale terminal, waiting for a confirmation and signing the slip, the buyer just waves his or her NFC-enabled phone over a reader. Depending on the amount and restrictions built into the payment system, the payment can be automatically accepted or require a numeric code verification similar to a chip and PIN credit card.
By 2014, 30% of new phones will be NFC-equipped, according to market research firm Nexperts. Half of new phones will have NFC by 2015. Those percentages are likely to be even higher for corporate travelers, who are usually early adopters of new phone technologies.
Clearly, if mobile payment is integrated into the corporate system, it will ease travel management. In turn, if mobile payment is not integrated, travel management will become more difficult.
The bottom line is that mobile payment is so easy and attractive that travelers will adopt it – whether it is part of the corporate travel process or not, Hanlon said.
“Educate yourself about mobile payment and ask your suppliers to build mobile the way you want to see it and use it,” he urged travel managers.
“Engage with us, engage with our competitors. If you don’t, your travelers will leave you so far behind you may never catch up.”