Redefining the Digital Retail space with
NFC, BEACONS and APPLE PAY

Smart phones and Tablets have completely transformed the way we interact with the world today. Mobile technology has not
only been limited to the communication aspect but has also become a part of our lifestyle including the way we shop, with the
introduction of new shopping experiences. This paper on Mobile Commerce is about such experiences and innovations.
Mobile commerce is fundamentally different from e-Commerce specifically because of the device used for performing the
purchase. Endeavour has been followingthe trends in m-Commerce since its inception in 2011.
“By 2018, e-Commerce is expected to
reach $1.35 Trillion while
m-Commerce market value would be
$6.26 trillion
Leading e-retail organizations such as Amazon, Paypal, Starbucks and others are providing tremendous push to the
m-Commerce sector, by introducing mobile purchase and payment provisions. There is no doubt that mobile provides a
plethora of opportunities for the retailers worldwide. Consumers are buying through their mobile devices irrespective of the
continent either they or the retailers are located in. The whole world has indeed become a single market; accessible and
available through any corner!!
Consumers aarree mmoorree lliikely to use their mobile devices for making purchases, if they are also awarded with additional services
& loyalty credits. A simplified process, ease of usage and user-friendly mobile interface are the key factors driving customers
towards m-Commerce and retailers need to ensure they provide this experience to their customers, in order to maintain brand
loyalty. This coupled with coupons and offers provided by retailers would encourage loyalty in this competitive business
landscape.
m-Commerce : Where is it headed?
Mobile Commerce is expected to reach $6.26 Trillion by 2018, growing manifold than e-Commerce. The mobile technology
coupled with rapid adoption of smartphones across the globe is indeed one of the main reasons behind this exponential
growth. This is further supported by the retailers who are keen to adopt it and be present where their customers are.
A plethora of mobile applications are also being launched everyday to ease the adoption of mobile commerce.
MMoobbiillee ddeevviicceess hhaavvee ggiivveenn aa bboooosstt ttoo tthhee mm--CCoommmmeerrccee ttrraannssaaccttiioonnss bbyy pprroovviiddiinngg aa ppllaattffoorrmm ttoo uunniiqquueellyy eennggaaggee wwiitthh tthhee
customer, enhance their buying experience, and ensure a hassle free process while addressing security concerns. Usage of
mobile technology has also helped the retailers gain insights on customer buying behaviour and patterns and thereby has
helped them provide customized offers driving more sales.
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Mobile technology has indeed made it possible for the retail industry to understand their consumers better and enhance their
shopping experience.
It would not be wrong, if we credit this growth of mobile commerce to the phenomenal years of 2010 onwards. A graph
below shows the growth in m-Commerce spending over the last three years.
If we segregate the mobile commerce activity between the two major categories in mmoobbiillee ddeevviicceess,, ii.e. smartphones and
tablets; the smartphones still register a larger user base which is expected to reverse in the coming years. This change can
be attributed to the ease of usage of tablets when compared with smart phones as tablets accounted for a larger share in per
user spending when compared with smartphones.
m-Commerce Spending by Quarter
Source:comScore m-Commerce Measurement
m-Commerce Spending by Platform
Source: comScore m-Commerce
Measurement-U.S-1H 2013
$47.17
$56.87
m-Commerce Spending Per User
Source: comScore m-Commerce
Measurement-U.S-1H 2013
37%
63%
$0.6
$8.0
$7.0
$6.0
$5.0
$4.0
$3.0
$2.0
$1.0
$0.0
Q2
2010
Q3
2010
Q4
2010
Q2
2011
Q1
2011
Q3
2011
Q4
2011
Q2
2012
Q1
2012
Q2
2013
Q1
2013
Q3
2012
Q4
2012
$0.8
$1.6
$2.4 $2.6
$3.5
$4.6
$4.9
$4.5
$3.8
$7.2
$5.9
$4.7
“ mobile devices, i
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The following graph shows the market value and growth rate for various forms of commerce forecasted by
Forrester Research, a leading research organisation. This further substantiates the aforementioned
argument regarding the growth of mobile commerce market.
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Key
stakeholders in
mobile commerce
m-Commerce: Challenges
Device Makers
Content Providers
Retailers
Network Operators
Payment Agents
Authorities
UUsseerrss
1. Information Disclosure
Information disclosure practices in m-Commerce are no less rigorous than would be expected
of traditional shopping platforms; consumers understand the risks involved while making mobile
payments, as well as the risks associated with having accounts linked to, or stored on a phone.
Retailers should ensure that transparent and functional dispute resolution mechanisms are in
place.
2. Security && LLiiaabbiilliittyy
Security and liability issues are particularly relevant to m-Commerce transactions given the
nature of technology involved and its susceptibility to theft, unauthorised transactions, or
mobile phone malware. Other related issues are phone misuse and unauthorised transactions.
3. Privacy
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including their financial details. Given this, m-Commerce transactions raise privacy issues for
consumers, as well as concerns around mobile spam.
4. Interoperable Systems/Technology Availability
Interoperable systems are essential to mass adoption of mobile commerce. Though proprietary
systems may function well in limited situations, they are a barrier to any large-scale
implementation.

m-Commerce : What to expect in future?
“The future of Commerce is Mobile.”
m-Commerce is changing the way we shop, allowing the consumer to shop for anything, anywhere, anytime. This is
indeed getting a boost from technological advancements in this field, such as the Wearables, Near Field
Communication (NFC), Mobile Payment Platforms, Augmented Reality, and Mobile Apps.Some viable use cases across
consumer and business fronts are listed below:
Retailers and merchants need to understand that they cannot restrict their participation in m-Commerce
transactions. Any customer, who uses a mobile device to access an e-Commerce site, automatically implicates the
retailer’s participation in the m-Commerce business. Hence the retailers need to control and innovate on providing
user-friendly online shopping experiences to customers.
According ttoo aa rreecceenntt ssuurrvveey, Mobile commerce revenue is predicted to spike in the next four years. Companies
need to focus on building mobile application incorporating wearables, NFC and other wireless channels. In the near
future, the mobile commerce space is going to reach another peak and play a major role in facilitating mobile
shopping, payments etc.
Beacons, Wearables and NFC are beginning to top the market and bring the best user experience for shopping and
payment services.
NFC Mobile Commerce iBeacons Mobile Commerce
(Courtesty: poq)
Applications for Consumers
Advertising & Promotion
Store Location Search
In-Store Navigation
Comparison Shopping
Self-Scanning
Authentication & Payment
Coupons
Loyalty Schemes
Catalogue Shopping
Applications/ Use Cases for Businesses
Order Management
Stock Management
Supply Chain Management
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Apple has launched the Apple Pay, a breakthrough contactless payment technology enabled with a NFC
chip integrated within the mobile devices. With this revolutionary technology one can buy products in-store
with just a touch on their iPhones.
This technology builds up on iPhone components like NFC technology, Touch ID, and the Secure Element. A
secure finger scan or NFC swipe is supported by the secure element which is a dedicated chip which
encrypts and stores payment information, helping in ensuring the privacy of the customers. Dynamic code
generation and TouchID authentication add to the security element in these transactions. With partners
including AmEx, MasterCard and Visa, it is set to redefine the way transactions are made in retail and
services space.
Some of the benefits that Apple Pay is rallying
around are:
Reduced security concerns as the interface is handled
purely by the consumer
Provides flexible mobile POS options and pop-up shops
Lower ‘card-payment’ fees (Apple is tying up with various
payment gateways and Banks) thus reducing the
retailer’s cost
With Apple Pay, Apple has successfully re-instated their
product dominance in the mobility market and made a swift
entry into wearable technology and mobile payments.
Google Wallet, released half-heartedly in 2011, could not
capitalize on this concept and mainly suffered due to lack of
NFC technology support. Apple has eliminated that
constraint by enabling both the iPhone 6 and iPhone 6 Plus
to natively support NFC ppaayymmeennttss.. AAppppllee Pay’s release also
coincides with the mass roll-out of NFC payment ecosystem
across industries and this will boost the technology
adoption rate.
There have been mixed reactions from the retail world to
this Digital Wallet wave. Giants like Disney, Target, Staples,
Starbucks, Whole foods and Open have been on-boarded
for introducing this payment system. Whereas retail giants
like Best-Buy and Wall Mart are still on the fence.
Apple Pay
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Let’s look at the benefits and limitations that a technology like Apple Pay
can present for the Retailers:
Pros
Ease of use for the end-consumer as instead of carrying countless cards, coupons and tickets, they can
store them in their phone’s digital wallet. This will in-turn increase the response to loyalty programs.
It is impossible for the consumer to download the App of each and every retailer they visit. Even if they
download, there is no guarantee that they will not delete that App. With Apple Pay, all the benefits of Apps
for retailers and restaurant chains are placed onto one single App: the user's phone.
A centralized system will help businesses understand their customers’ spending patterns better and roll out
relevant promotions to retain them.
Cons
The cost of installing and maintaining NFC enabled scanners is very high and many retailers are sceptic
about the adoption response to this technology by their end-user.
Retailers will have to bear Merchant fees for mobile-payment systems, which usually is higher than for
plastic cards.
Best Buy, Wal-Mart and Target Corp. are backing a retailer-owned mobile technology group called Merchant
Customer Exchange. MCX's payment gateway, based on QR code instead of NFC scan, needs only a
software download and works on all existing iPhones and Android devices, unlike Apple's which is only for
the latest generation handset.
With time and the end consumer’s response to Apple Pay, the industry will definitely undergo a change in the
coming months. The release of Apple Pay, will bring in majority of mobile phone manufacturers following suite and
bringing in NFC support for their devices. With features that simplify and speed up the purchase process at retail
outlets, this will certainly present a plethora of opportunities for businesses.
Integration with Apple Pay:
AAppppllee Pay integration with m-Commerce App involves the participation from Retailer and Payment Providers; and,
the consumer only drives it. App integrators can enable Apple Pay for an App by providing Apple Pay options and
integrating with SDKs provided by the payment provider for handling the transaction. With this, consumers can
easily purchase items without leaving the App by using any of the cards saved in their Passbook.
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Endeavour – The Mobility Company is a niche and exclusive mobility consultant and system integrator, committed to
building scalable solutions for our enterprise customers. Since 2002, we have been the chosen partner of over 300
large enterprises and start-ups for their Mobile and Cloud engineering initiatives. Endeavour’s secure, innovative
and cross-platform solutions leverage existing assets to minimize costs and give businesses a competitive edge.
Our global experts guide our customers through road-map conception, user experience led engineering, back-end
integration, and deployment.
Our key focus areas include:
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