Oct 18, 2006

What is much more important than speed at the checkout?

Think about this: Every time you reach the checkout in some of the world’s largest supermarket chains, the cashier asks, “Do you have your loyalty card?” You hand it over, they swipe it, and hand it back to you. If you don’t have one, the cashier sometimes invites you to enter your phone number, which achieves the same thing. Or if you’ve never applied for their card, they will invite you to do so right then. That whole process takes lots of time at the checkout. And if you're like me and don't like having lots of cards in your wallet, it is frustrating to constantly have to go through the hassle.

If speed is the holy grail at the checkout, why in the world are merchants doing this? If merchants really valued speed at the moment of payment, they would quickly eliminate this whole tedious process. Some merchants clearly value data gathering over speed. They can live with slower transactions if they can get their hands on valuable customer data.

This is especially relevant if you are planning a contactless deployment. Contactless just for speed doesn’t make sense. Contactless that also uses the chip to make customer behaviour data available at the moment of payment, which merchants can use to instantly trigger targeted promotional offers, makes much more sense and makes contactless much more valuable to merchants.


Colin said...

This goes right to the core of the transaction experience. But I have to ask, why is so hard that almost no Banks or merchants get this point. Is it so hard to implement?

Bruce Cundiff said...

I understand and agree that using the current arguments for contactless acceptance (speed of transaction) make absolutely no sense for retailers such as grocers. There is a certain amount of time built into the transaction in consumers' minds (you didn't even mention the time it takes to scan the items, although I guess that could be taken care of with an RFID solution also!!).

One question, though. If it is data that merchants are after, and many consumers such as yourself (and myself) don't like to carry too many cards--loyalty and otherwise--then why wouldn't a standard EMV "contact" (for want of a better word) chip-based solution work in this instance? If this data gathering is so important for grocers and other merchants, why didn't they embrace chip solutions that the associations have been pushing for 10 years or so?

Have we reached the point in the US market that contactless is the fait accompli for any chip migration? My answer would be "yes."