Mobile is set to be a bigger disruption than online sales as it moves further away from what we traditionally think of when it comes to consumer transactions. The latest launches by Mastercard and Paypal remove the friction from shopping on the go and provide a glimpse of the changes still to come.
Mastercard announced the launch of Facebook Messenger bots yesterday that allow consumers to pay with the company’s Masterpass digital wallet, offering speedy mobile transactions.
With the bots, shoppers can now place orders through Messenger at Subway, and FreshDirect and The Cheesecake Factory have bots in pilot mode.
The credit card company announced in October that it would be rolling out AI bots to allow consumers to manage their finances at banks and transact purchases with retailers via messaging platforms.
Tor Opedal, vice president of U.S. market development at Mastercard, said its necessary for the credit card company to offer capabilities wherever its users already spend their time.
“Retailers must anticipate what consumers need,” Opedal said at Facebook’s F8 developer conference where the new technology was rolled out, according to ZDNet. “How well can we personalize, customize and socialize?”
In the launch announcement last year, the company quoted stats from research firm Gartner that projected nearly $2 billion in online sales would be performed exclusively through mobile digital assistants by the end of 2016.
“Facebook messenger has got over 1.2 billion customers using it now and the target customers overlay perfectly with the demographics of our customers,” Carman Wenkoff, chief information and digital officer of Subway, told CNBC, by way of explaining why the company sees bots as an opportunity.
Andrew Feinberg, a principal at consulting group Deloitte, gave another reason why restaurants might want to consider adding bots to their arsenal. He told the publication that mobile order checks could be as much as 20 percent to 30 percent higher than traditional in-store checks.
With Subway’s bot, the interaction mimics the ordering process in store, while The Cheesecake Factory’s bot focuses on gift cards and FreshDirect’s uses group threads to allow multiple people to add to the shopping list, according to The Washington Post.
In a related launch, Paypal is also continuing to bridge online and offline.
The company has announced a new partnership with Google, which allows shoppers to make app and online purchases as well as transactions at brick-and-mortar stores that accept Android Pay using their Paypal balances. As the functionality expands, shoppers will also be able to pay via the credit cards they have stored in Paypal as well.
The initial participating retailers include Dunkin Donuts and Walgreens.
Last year alone, PayPal processed $102 billion in mobile payment volume and two billion mobile payment transactions.
Statistics like that show why retailers are no longer aiming solely for consumers’ wallets. They now have their eyes on their phones too.