Despite the growing popularity of mobile payment apps like Apple Pay and Android Pay, over the past couple years, retail stores have been slow to adopt them.

A little more than a third of consumers (36 percent) have used some form of mobile payment applications in the past year.

Source: Walker Sands Future of Retail Study 2016

Despite the lack of enthusiasm in embracing this technology, brick-and-mortar retail stores are trying to remove as much friction as possible from the payment process to eliminate consumer frustration and enhance the ‘buyer’s experience’.

To this end, retailers have adopted proprietary retail mobile apps that enable the customer to pay only in their stores (closed-loop payment).

Figure 1: Source: Walker Sands Future of Retail Study 2016

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Barcodes have been around for decades but strangely enough, the use of barcodes in mobile payments have only recently been picking up. Starbucks has been a pioneer in mobile payments using barcodes. Walmart and CVS have recently introduced a similar solution. Because of the embedded cameras, smartphones have been always capable of reading barcodes and that is one of the main reasons why barcodes are so ubiquitous.

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In 2012 the company Xius started to include NFC readers on  Smart-posters and began calling them Active-posters. The poster is embedded with an NFC reader (instead of a passive NFC tag) while the smartphone emulates an NFC tag.

Using Active-posters, smartphones need to emulate tags (Card Emulation Mode), just like Smart-posters. Until the iPhone 6, that behavior was unique to Android devices.

iPhone 6 added support for tag (card) emulation, but only for payment purposes (emulating a contactless credit card), since it was needed for their Apple Pay service. iOS 9 expanded the support of NFC beyond payment and launched the NFC-enabled passes.

Using NFC-enabled passes, iPhones can now interact with Active-poster. With the iPhone, the experience must be initiated from the Apple Wallet and then can be passed onto an app. With Android, the experience can start and continue directly from an app.

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Smart-posters offer higher interaction versus their QR counterpart. With QR codes, the user has to launch an app, aim the camera to the QR code, scan or take a picture, and wait for the device to react. The light conditions, elements, age of the poster, etc. may interfere with the user interaction. With NFC, on the other hand, users simply tap on the poster to get the information (“Tap-to-Get”) stored on the tag (URLs, coupons, etc.). The information is transferred to the phone instantly, thereby improving the user experience (UX).

Smart-posters requires the smartphone to support NFC Discovery Mode which is currently limited to Android and Windows Phone mobile devices. Devices that support NFC Discovery Mode have the capabilities to read tags (and hence can read Smart-posters). Unfortunately, NFC-enabled iPhones don’t support Discovery Mode and can only emulate NFC tags. This is referred to as Card Emulation Mode. Without Discovery Mode support, the iPhone do not have the capability to interact with Smart-posters.

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While walking through mall or a retail store people are bombarded with information as advertisers fight for customers’ eyes.  Traditional posters provide visual promotion displaying phone numbers and/or web addresses, which the customer needs to remember or write down.  Because there is no analytics produced from the information displayed, and traceability is minimal, the response rates are very low.

On the other hand, the Enhanced Displays or Enriched Posters include methods to bridge the physical and digital world. Their goal is to provide a seamless user experience by converting the printed content into digital format, and from offline to mobile.

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What is Tokenization

A token is a randomly generated number that is used to hide a customer payment credentials stored in a credit card’s primary account number (PAN). Tokenization replaces the original payment credentials with a secure substitute. This unique identifier, called a Payment Token or Tokenized PAN, cannot be used if stolen as it is just a reference number, which only the bank can map to the customer’s payment credential.

Tokenization for credit cards have been around for a while, although it was recently popularized by the introduction of Apple Pay back in 2014.

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Apple Wallet is a preloaded app including iOS (starting from iOS 9, it was originally known as Passbook). Users can store credit cards, debit cards, boarding passes, store cards, tickets, retail coupons, general passes, etc. Wallet is supported by multiple coffee shops, airlines, party services, movie theaters, conferences, loyalty cards, etc.

The Wallet is divided on 2 sections:

• Apple Pay: Mobile payment service based on Contactless EMV specification.
  • Stores tokenized version of credit cards.
  • Users can pay in stores that accept contactless payments.
  • Synched up with iCloud to display last credit card transaction, etc.
• Passes:
  • Part of the initial Passbook ecosystem (launched on iOS 6)
  • Stores Virtual versions of boarding passes, store cards, etc.
  • Interact directly with iOS apps
  • Synched up with iCloud and can displayed dynamic data such as balance on the rewards card expiration date, flight status , etc.
  • Pass changes can be pushed via the Apple Push Notification Service

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