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Launch of Android Pay is another nail in the coffin for the card terminal

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There are definitely some cynics amongst industry commentators who doubt that paying with a mobile will ever be the norm in a world where many of us have contactless cards and paying is already just a simple tap.

Yet this argument completely misses the point and ignores the reason why so many of us in the mobile payments space are so excited about what the coming months will mean for all of us.

Mobile payments aren’t just about replacing the in-store status quo of contactless or chip and pin. The real area for growth is in-app, for people on the move to quickly and seamlessly make everyday purchases.

Once it becomes the norm to pre-pay for things – such as pre-ordering and paying for lunch and then skipping the queue to pick up your order – we foresee the death of chip and pin and the card terminal.

Consumers will increasingly buy the things they need with a single tap of the supercomputers in their pockets and Android Pay, with its 53 per cent share of the UK smartphone market, is going to be a huge part of shaping consumer behaviour at the (increasingly digital) checkout.

Any business with physical goods or services and a mobile app can take advantage of improved customer relationships and valuable data from interactions with them. 

In the past few years we’ve moved on from a focus on app downloads to a focus on app user experience, and it’s one of the reasons why app use has soared as consumers enjoy an all-round better experience in-app.

Of course, technology has also made apps far more useful too, and many companies enable consumers to browse their products, read other customers’ reviews, pay for the item(s) and either collect or arrange delivery. Commuters alone are already spending £10m a year on their way into work. Expect that figure to grow too.

App developers will embrace Android Pay because of its added value to the user experience. When buying something “in-app” with Android Pay, you’ll never have to enter your shipping and billing address for online checkout again. Just select Buy with Android Pay” and your payment is processed quickly and securely.

It’s not just chip and pin that’s under threat from this move to apps, it’s also the card wallets in our pockets and purses. With Android Pay, an API can be coded into supported apps, meaning it can access loyalty card information and include it in each transaction.

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No more carrying around scores of shabby loyalty cards with one stamp on them, mobile payments are making the everyday quicker and more seamless for users. Retailers can’t wait for a faster, more accessible payment method to truly take off in the UK and they’re not alone.

Despite the industry anticipation, some in the industry aren’t yet convinced, suggesting that Apple Pay’s performance has been underwhelming since its launch in the US, and subsequently other countries, in October 2014.

Yet they’d be mistaken if they think this infers mobile payments as whole are a dud. Apple’s lower smartphone penetration and the fact that Apple Pay technology is only available on later models of iPhone means that it hasn’t yet reached a wide audience. As people upgrade in coming months, and Apple launches the cheaper iPhone SE, we can expect usage to rise significantly.

Android Pay – when it launches – will have a vast potential pool of users and contactless payment adoption is set to accelerate when it’s live, with consumers and businesses everywhere benefiting. In the US, Staples saw a 109 per cent increase in overall conversion over nine months after accepting Apple Pay, and Apple of course only has an 18 per cent share of the smartphone market.

When Android Pay launched in the US, many companies offered incentives for customers to pay with Android Pay, whether $5 off your meal or $10 off a Lyft ride. It’s likely the same approach will be taken here, as once people have used mobile payment methods, they usually keep doing do. 75 per cent of Apple Pay users who’d tried it said they use it either whenever they can, or when they remember to.

It’s clear that we’re still only scratching the surface of what mobile payments have to offer businesses and consumers. Yet as the high street moves increasingly onto our smartphones, there’s a huge opportunity for businesses which embrace the technology.

The first rule of modern marketing is to reach consumers where they are. Increasingly that’s on their mobile, and these days, that’s where many want to buy. It’s a huge waste of money not to let them.

If your business is yet to adapt to the new payment movement, these are the 11 UK cities where you risk losses by snubbing cashless consumers.

Dennis Jones is the CEO of payment services provider Judo Payments

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