Digital Transactions Authoritative, insightful and timely information for payments professionals
By Kevin Woodward
@DTPaymentNews
Retailer Kohl’s Corp. plans to tweak its newly launched Kohl’s Pay mobile-payments service following the holiday-shopping season. And Amazon.com Inc. is targeting more retailers for its Pay with Amazon service.
The upcoming holiday-shopping frenzy will serve as a proving ground of sorts for Kohl’s Pay, Ratnakar Lavu, Kohl’s chief technology officer, tells Digital Transactions News. “We wanted to learn from the holiday season,” Lavu says. “It will be our biggest test bed.”
A barcode-based service, Kohl’s Pay ties payments, loyalty, and offers into the Kohl’s app, using technology developed by OmnyPay Inc. The service works only with the Kohl’s Charge card, issued by Capital One N.A.
Lavu predicts Kohl’s Pay will generate copious amounts of data, especially given that enrollment in the app is up by 70% following its launch on Oct. 5. The retailer has yet to increase its marketing efforts around the service, but expects to do so in coming weeks.
Early feedback indicates the Kohl’s Pay transaction flow moves smoothly except in approximately 5% of transactions, where further tweaking will be done, specifically in the interaction between the associate and the customer in certain cases, Lavu says. “We will work with stores organization to ensure good training and understanding for our associates,” he says.
Not only does the payment experience need to be smooth, but provisioning of the card and loading offers and using rewards need to be, too. Early data finds that 99% of Kohl’s Pay users are members of the retailer’s Yes2U rewards program and that 40% are sending offers from their wallets. Other data indicates that a least one Kohl’s Pay transaction has now happened in two-thirds of the merchant’s more than 1,100 stores.
“Customers are able to understand what Kohl’s Pay is,” Lavu says. For simple transactions, such as those with few items and not many offers, transaction time using Kohl’s Pay is akin to using a Kohl’s Charge card, he says. A more complicated transaction, however, can be optimized further, he says.
Meanwhile, online retailer Amazon.com Inc. continues to find ways to tie its vast inventory of consumers with Amazon accounts to in-store transactions.
Specifically, Amazon wants to bridge the gap between the online and in-store payment experiences, says Patrick Gauthier, vice president for Amazon Payments. “We’re pushing across channels and devices, like TV and Echo,” Gauthier tells Digital Transactions News. Echo is an in-home virtual assistant that consumers can use to make Amazon.com purchases, play music, and interact with third-party companies.
For example, Amazon, which started as an online bookseller, now operates three bookstores that consumers can make purchases in. Most of the consumers shopping in these stores already have the Amazon app on their smart phones. That enables Amazon to know their location if they check in at the location, Gauthier says.
Amazon, though, is not just eyeing its own retail operations. Earlier this year, Amazon enabled its payments service for in-store transactions with fashion retailer Moda Operandi Inc..
“Our goal is to remove friction for our consumers,” Gauthier says, adding that Amazon is in discussions with other retailers to enable this service.
Integrating Amazon Payments could help alleviate some of that friction because it means consumers don’t have to create and remember unique passwords for every participating retailer, and it eliminates the need to create a new account for each new retailer, Gauthier says.
“A lot of the failure in the mobile experience today is [caused by] trying to create a separate payment-branded experience,” he says. “That’s not what consumers and merchants want.”
