DALLAS -- The use of mobile technology at convenience stores--from smartphone apps to a form of payment--were central in both formal and informal discussions at last week's NACS's The Tech Event. The conference, tying in the association's annual technology trade show with its Petroleum Convenience Alliance for Technical Standards (PCATS) meeting, covered many topics, but none more talked about than mobile.
PCATS working session attendees sitting in on the mobile committee saw a presentation of a field implementation presently going on with Waycross, Ga.-based Flash Foods Inc. The pilot, at one store with chain employees testing the setup, offers loyalty-card holders the ability to pay for fuel using their mobile phones.
Danilo Portal, COO and CIO of National Payment Card, Coconut Creek, Fla., showed the mobile PCATS committee how the process worked using video and diagrams, starting with a soft-key option at the pump to pay with the chain's loyalty card. Customers, who've already downloaded the chain's app, further the transaction on their mobile phones, which provide a "tokenized" series of numbers to enter onto the pump keyboard to authorize the sale.
For the most part, the transaction goes through the normal, ACH (automated clearinghouse) pathway, creating a relatively simple solution for Flash Foods. Session discussion began about the "closed loop" model, but workshop attendees knew that the presentation was offering up one of what could certainly be numerous ways to handle mobile payments.
"Mobile has been changing the landscape of payments," said Drew Mize, COO of The Pinnacle Corp., Arlington, Texas, which supplied the software for Flash Food's loyalty program that interfaced with the mobile pilot. "The industry is realizing there are dozens technologies being developed and it's a question of who's going to be first--not first to market but in ubiquity. We've seen solutions come out every week, but at the end of the day, is that what we're ultimately going to be doing? Have we set the bar for industry? I don't know, but it's a step. Those who do nothing are at risk."
The evolution of mobile payment is an international conversation, as Alan Thiemann, general counsel for NACS and PCATS. He has been working on a global level to discuss mobile payment standards for retail, offering up PCATS as an important voice in the area of payment at the pump.
Discussion internationally has involved countries such as Japan, where quick-response (QR) codes are part of the mobile-payment process. Understanding what the international group determines as far as standards is an important step for PCATS in its development of mobile standards for the c-store industry.
On that point, a participant asked if any of the major, emerging mobile-wallet players are at the table. Thiemann said no. Despite efforts to reach out to these providers, none has agreed to participate in standards discussions thus far.
The big concern is any proprietary set of rules become the standard, said Gray Taylor of PCATS, noting how the goal of the standards group is to allow for innovative solutions that may emerge in the future. The standards they craft must allow for that creativity.
Along this line, mobile couponing is also of growing interest for retailers as Brad Van Otterloo, vice president of sales and general manager for Koupon Media, Frisco, Texas, told session attendees at PCATS. His company is assisting Dallas-based 7-Eleven with its app for mobile coupons.
He said the current paper system of collecting coupons, mailing them to clearing houses and waiting for reimbursements doesn't work in the c-store space, but that consumer packaged goods (CPG) companies are extremely interested in how digital coupons can help them access the channel.
Discussion from the group focused on current PCATS standards for loyalty and how many of those specifications could work when discussing mobile couponing.
Though not speaking directly to 7-Eleven's app, Van Otterloo said Koupon Media is a cloud-based platform for mobile coupons that provides a standard, allowing customers to receive and redeem coupons via their smartphones. It provides fraud-reduction features such as making sure the offer disappears after a certain time period. His founders were developers of a company called Mango Mobile that was eventually sold. They were at last year's NACStech meeting--their first ever as a company--but only walking the floor. He said 7-Eleven had a really soft release of its app, starting out with texting this past April.
Taylor said the industry needs to continue its leadership role in technology for those outside the channel. Doing so will allow incoming technologies the opportunity to either "fast fail or fast succeed." He told general session attendees, "Our loyalty standard allows for any supplier to connect with a POS device. Our device integration standard allows price signs to connect. Our data security team is regarded as experts."
On other mobile topics, Phillipe Le Hegaret, Internet domain leader of the World Wide Web Consortium, spoke to issues of mobile platforms. He described issues of multiple platforms--IOS, Android, Windows and upcoming options from Intel or Firefox--to different size screens.
Retailers struggle further in picking formats such as native, Web or some hybrid. Into this mix, Hegaret tossed in developing the new HTML 5 format, for which a standard is due in 2014. The result will be more animation, the ability to work across devices and better communication functions. Privacy may be a concern, but he said it's a process.
Evan Schuman, editor of StorefrontBacktalk.com, provided attendees with quite a few lessons from retailers in other channels experimenting with mobile outreaches to consumers.
Here are a few:
- PayPal training in a New Jersey mall was nonexistent, with managers not knowing about what was coming in and the setup not being friendly to customers wanting to use the option.
- KFC launched a mobile campaign and found out that chicken is a great mobile lure. People typically order chicken on the way home from work, whereas, for say, pizza, they order when they're already at home on their desktops.
- Duane Read stores in New York launched a mobile wallet program as a scanning game, starting small by just getting customers used to pulling out their phones in the stores.
- Macy's had a policy of allowing people without their cards on hand to use their Social Security numbers. Sneaky data thieves would listen in to customers talking to cashiers and then go on their own shopping sprees at other Macy's locations.
- An Apple initiative that involved purchases in the store via mobile devices led to a highly publicized snafu, where a customer who merely failed to complete a transaction was harshly dealt with by employees.
In light of the announced data breach at Brentwood, Tenn.-based MAPCO's c-store chain, attendees at the conference flocked to its EMV session. EMV stands for Europay MasterCard Visa and refers to a chip-card technology that helps better secure credit-card data. It's a standard highly adopted in Europe and Canada, but unfortunately, in the United States, retailers would have to pay for upgrades to accept the cards. The major credit cards have already set a deadline for EMV compliance by 2017.
Tim Weston, senior product manager for payment, Wayne, a GE Energy Business, Austin, Texas, says many doubt that the industry will be able to reach compliance by the 2017 deadline, which is creating confusion. "Everyone's concerned about the 'regret spend,'" he said. "Retailers are looking at when to move on which technology and how to best use their resources."
Shekar Swamy, president of data security assessment firm Omega ATC, Ellisville, Mo., believes c-stores are not yet equipped to handle data security for mobile devices.
For a recap of daily coverage of the 2013 The Tech Event from a mobile perspective, view CSP senior editor Angel Abcede's "Mobile 2 Go" blog.
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