Mobile Payments And Beacons: The True Test Comes In 2016

The future of these two retail ‘game-changers’ isn’t guaranteed, says BIA/Kelsey’s Mike Boland.

Crystal ball image of a blue skyEarlier this year, it appeared that nothing would stop the march of mobile payments and beacons from transforming the nature of in-store consumer engagement, while remaking traditional retail models into online-to-offline vanguards.

But as Mike Boland, BIA/Kelsey’s chief analyst and VP/content, looks at the prospects of both mobile pay and beacons in 2016, he’s not sure those models will demonstrate clear establishment and success in the minds of consumers and businesses.

One thing Boland is confident of: 2016 will be make or break for mobile payments and beacons.

“Utility-oriented features will be the defining success factor for mobile payments,” Boland writes among the 20 predictions featured in BIA/Kelsey’s What’s Next report (download here). “So far, mobile payments have been held back by a classic ‘solution in search of a problem’ mindset. A few companies have broken that mold with features that engender real utility.”

Starbucks is one of the brands that Boland credits with offering a reasonable example of how mobile pay can appeal to consumers. For example, Starbucks knows that to its on-the-go customers, getting them their coffee ever-more rapidly is something that its will appeal to the tech-centric people who would do anything to avoid a line.

BIA/Kelsey's Mike Boland
BIA/Kelsey’s Mike Boland

It’s harder to say if the other fast/casual food service retailers — not to mention grocers and restaurants that may attract a less tech-savvy customer base — require such a robust effort to eliminate crowded lines.

“We’ll see in-aisle payments develop as a retail payment method due to its ability to skip checkout aisles,” Boland said. “The winners in mobile payments in 2016 will be those that adopt these principles, as opposed to a promise of simply a lighter wallet. What’s at stake is finally bringing offline attribution to reality, with big implications for tracking ROI and efficacy in local advertising.”

As for beacons, the big question is how able are brands when it comes to getting shoppers to download an app, opt-in to receive messages while in-store, and turn on the Bluetooth receive on their smartphone.

Still, those are not necessarily insurmountable hurdles for shoppers, especially as retailers seem intent on going beyond bribing their shoppers with discounts and offering a virtual sales assistant, in-store wayfinding, and other tools that “enhance the in-store experience.”

However, Boland also notes that a lot depends on the stability and scale associated with Apple’s iOS-based iBeacon and Google Android’s Eddystone indoor communications platforms.

“Adoption will grow if beacon engagement is integrated more seamlessly for invisible or ‘background’ functionality at the OS level,” Boland argues. “That means the next move is on Apple and Google.”

About The Author
David Kaplan David Kaplan @davidakaplan

A New York City-based journalist for over 20 years, David Kaplan is managing editor of A former editor and reporter at AdExchanger, paidContent, Adweek and MediaPost.