A recent survey released by ACI Worldwide reveals that the retail industry is bracing for transition as mobile payments, EMV migration deadlines and questions over PCI data security standards dominate industry conversation. The survey, which polled attendees of the National Retail Federations (NRF) 2013 annual conference (Retails Big Show), sought to identify key trends affecting the retail segment. Among the findings, ACI found that:
- Google is viewed as most likely to win the mobile wallet war, versus competitors PayPal and ISIS
- A lack of common payment standards is creating barriers to entry for retailers
- Retailers are not prepared for the 2013 and 2014 EMV deadlines
- Fraud and customer privacy protection are seen as the most significant risks to implementing a mobile strategy
The data we collected shows a variety of issues facing the retail industry, explains Jeff Hale, senior vice president, retail payments, ACI Worldwide. Simply stated, we are at an inflection point as retailers face pressure to implement mobile payment strategies, meet EMV migration deadlines and comply with PCI data security standards.
Google viewed as most likely to win mobile wallet war
According to survey respondents, Google is believed to be the most likely to win the mobile wallet war. While more than half (53%) believe Google will prevail, an additional 25% believe PayPal will come out on top, while only 4% expect ISIS to edge out the market competition. Interestingly, nearly one in five respondents (19%) believes a new market entrant could gain traction in this emerging segment.
Interestingly, nearly a third (32%) of those surveyed expect the entrance of new mobile wallet providers to be the market development that will most impact retailers over the next 12-18 months (as opposed to US EMV migration, PCI data security standards, and increased implementation of contactless POS terminals).
Mobile charges forward, despite industry concern
According to ACIs survey, 83% of those surveyed expect the rate of implementation of contactless POS terminals to increase or significantly increase, as compared to 2012; a sign that mobile payment acceptance will continue to grow in 2013.
However, despite this prevailing sentiment, the industry believes there are still barriers to overcome in implementing a mobile payments strategy. The majority of respondents (44%) believe that the greatest barrier to entry for retailers when seeking to receive mobile payments is the lack of common standards for payments. 25% believe the greatest barrier is the building of a POS infrastructure, while 17% note the costs of implementation. An additional 13% felt that it was the lack of consumer devices offering NFC that most inhibited retailers from receiving contactless payments.
When asked what the biggest risk to retailers was when it came to implementing a mobile payments strategy, an overwhelming majority of respondents (68%) believed the answer was customer privacy protection (43%) and increased instance of fraud (25%). Nearly one-in-four (24%) identified concerns over diminished customer contact and relationship as the biggest risk.
The data we collected confirms our belief that 2013 will be an important year in the growth and acceptance of mobile payments, continues Hale. In our evolving economy, consumers expect to be able to shop and conduct transactions anywhere and at any time. What you see in this survey is a confirmation that the delivery of mobile solutions aimed at meeting this demand is top of mind as retailers focus on building a mobile experience that enhances customer satisfaction and intimacy.
Retailers not compliant with PCI data security standards
According to the survey, nearly a quarter of those polled (23%) felt PCI Data Security Standards would most impact retailers over the next year to year and a half – an interesting point, given that the prevailing sentiment was that retailers are not compliant with current standards. According to the data collected, only 36% of respondents believe the retail industry is compliant. Contrastingly, 63% believe retailers are only somewhat or not at all compliant.
US retailers unprepared for EMV migration
When asked to identify what would most impact retailers over the next 12-18 months, 28% of respondents believed it would be the United States EMV migration. In a follow-up, when asked to identify how prepared retailers are to meet upcoming 2013 and 2014 EMV migration deadlines in the US, a majority (56%) indicated that retailers were either unprepared or very unprepared to meet the deadlines. 42% believe retailers are prepared while only 2% felt retailers were very prepared.
Compliance with new EMV and PCI data security standards continues to resonate as an area of deep concern for the retail industry as a whole, concludes Hale. The US migration to chip based debit and credit cards is very real and retailers must prepare for looming deadlines or they will face significant financial liability. In a similar vein, lack of compliance with PCI data security standards must be addressed. Its our hope that the data we collected will aid in furthering a conversation about the significant compliance issues facing retailers both in the United States and across the globe.
About the survey
The survey of 225 retail professionals was conducted by ACI Worldwide at the at the 2013 National Retail Federation Big Show in New York, NY on January 14-15, 2013. The survey includes responses from retailers, technology providers, vendors, credit card/payments providers and wholesalers.