• include an introduction consisting of describing the background of the case study.
• The review and answers should follow the standard
• The body of the paper should consist of the answering of all questions posed at the end of the selected case study.
• A Conclusion should be included as should citations
• In addition to the textbook, at least one other scholarly paper should be used.
  • At least one in-text citation is required for all referenced sources (textbook and additional other scholarly paper).

Mobile Payments

In a country where cash is king and almost everyone owns a cell phone, Japan's NTT Docomo led a major drive into mobile payments and m-commerce. The mobile phone carrier pioneered the use of near field communication (NFC) chips inside its cell phones, enabling them to exchange data wirelessly over a few centimeters. Subscribers to Docomo's wireless network can pay for their cappuccinos at participating stores by tapping their cell phone against a special terminal or just waving it nearby.

When a customer taps the cell phone to pay, the expense is automatically logged into a digital expense report and charged to the customer's account. Called osaifu keitai in Japanese, the cell-phone wallet frees people from carrying cash. Consumers use their cell-phone wallets to buy subway, train, and airline tickets, and the phone's chip also serves as an electronic key to control access to buildings and homes. Cell-phone wallet holders can check their balances, loyalty points, and purchasing history from the handset and receive promotional discounts.

Mobile payment systems around the world vary considerably. In Singapore, for example, merchants display QR codes at the point of sale which purchasers scan with their mobile phones. Purchasers enter and authorize the amount, which then appear on their accounts. In countries in which few people have credit or debit cards to amass charges from many different merchants, direct carrier billing is popular. Charges the user authorizes on the phone are added to the cell phone bill, which can be paid in cash.

In the United States, mobile payments have been slow to take off, partly because credit cards are so popular and also trusted. The credit card industry builds in essential safeguards against fraud and also offers incentives such as cash advances, frequent flier miles, or cash back. Switching to mobile payments would be a major change in customer behavior. At most restaurants, you would need to hand over your smartphone to the server instead of offering a credit card because Apple Pay and other major players rely on NFC technology.

While Apple is a major player in the mobile payment industry, the company has had some slip-ups that make customers wary. While waiting for his tech support appointment at a New York Apple store, one customer decided to purchase some headphones. He used the Apple app to scan the barcode and charged the purchase to his iTunes account. Later, when he started to leave with his headphones in a bag, an employee asked to see a receipt. He located the app on his smartphone but then found the transaction had not completed. Instead of letting him click the last button to confirm, the clerk called the police and the customer was arrested for shoplifting.

Consumers will need more incentives to try out any of these new services, and they must develop the kind of trust they already have in credit cards, debit cards, checks, and cash. Convenience is one incentive, but creative retailers can tap other features that tie mobile phones to purchasing. Teen clothing chain Aeropostale, for instance, offered an app that let customers choose what music the store would play. The teens hung around the store for 30 minutes or more to hear their selection. The long wait offered plenty of time to shop, and the company learned a great deal about its customers' music preferences.

As mobile payment experiments play out and technologies mature, those lines at checkout counters may get much shorter. They may even be completely eliminated, as they have been at Amazon Go stores in which in-store sensors detect which products you remove from shelves. Leather wallets stuffed with credit cards, loyalty cards, photos, and cash may become extinct.

Discussion Questions

1. 6-21. What are the potential benefits of mobile payment technology for consumers? What are the potential benefits for retailers?
2. 6-22. What are the risks for consumers and retailers? What are some ways that these risks could be overcome?
3. 6-23. How could this technology affect the telecommunications and consumer banking industries?
4. 6-24. Do you predict mobile payments will become dominant in the United States? Why or why not?

Sources: Chorzempa, M. (2019). A payment apps paradise. MIT Technology Review, 122(1), 76-77, http://search.ebscohost.com/login.aspx?direct=true&db=bft&AN=133577623&site=ehost-live&scope=site, accessed June 2, 2019.

Datan, ., & Grler, C. (2016). Factors affecting the adoption of mobile payment systems: An empirical analysis. EMAJ: Emerging Markets Journal, 6(1), 16-24. http://doi.org/10.5195/emaj.2016.95

Lago, C. (2018). Singapore launches unified QR Code payment system. CIO, www.cio.com/article/3305143/singapore-launches-unified-qr-code-payment-system.html, accessed June 2, 2019.

Leow, A., Wong, A., Babjer, V., Resnick, M., Clark, W., & Revang, M. (2017). Predicts 2018: Mobile Apps and Their Development (No. G00341516). Retrieved from Gartner Research website: www.gartner.com/document/3834674?ref=solrAll&refval=219569599&qid=2c6b78e3c8cf82cc5fda797a

Taylor, E. (2016). Mobile payment technologies in retail: a review of potential benefits and risks. International Journal of Retail & Distribution Management, 44(2), 159-177. http://doi.org/10.1108/IJRDM-05-2015-0065