At Its Innovation Center, Visa Puts an In-Store Self-Checkout App to the Test

Visa Inc. is providing emerging self-checkout provider Digital Retail Apps another venue to showcase its smart phone-based service by enabling it at the Visa Innovation Center, its technology lab in San Francisco.

Toronto-based Digital Retail Apps says Visa will integrate the SelfPay technology into the Visa Everywhere Shop app, enabling consumers to shop and pay from anywhere in a store directly on their own mobile phone, without queuing up at a checkout line. Visa is making SelfPay available in an Android app for the Samsung Galaxy S6 device.

SelfPay works like this. Once a SelfPay account is set up, a consumer can shop with it inside the store. SelfPay taps into the iPhone’s geo-location technology to know when the device is inside a participating retailer.

After recognizing the consumer inside the store, the app displays a custom retailer-branded screen, which unlocks the capability to make a purchase. The user scans either the Universal Product Code or a barcode placed on the merchandise and generated by the retailer’s point-of-sale system. SelfPay displays an accurate in-store price and product description, also pulled from the retailer's POS system. The shopper then adds the item to her cart, selects a payment method, and enters a SelfPay PIN.

When the customer exits the store, a sales clerk scans a barcode generated on the customer’s phone by the SelfPay app to ensure products are paid for. Available payment methods are credit and debit cards, PayPal, and Apple Pay.

Digital Retail Apps, which in August lined up additional funding for its expansion efforts, is in discussion with large chain retailers, Wendy MacKinnon Keith, chief executive, tells Digital Transactions News.

“There is growing interest in this kind of technology, where you have this ability to put the point of sale directly on a shopper’s device,” Keith says. “A lot, or some, of the reason for that is as the technology and evolved and improved, and with Apple Pay launching last year, it has started to change the dialog in executive suites where they are stating to take a longer look at mobile payments in general.”

Retailers appreciate reducing friction in the purchasing process, “and there is no greater point of friction than the checkout line,” says Rick Oglesby, senior analyst for Centennial, Colo.-based Double Diamond Payments Research, in an email message. “Therefore, self checkout solutions will continue to surface and iterate until they finally achieve broad adoption. However, these solutions simultaneously represent a very large change in both consumer and merchant behavior, and the security aspects need to be addressed not just through technology, but also in the minds of the retailers, who need to feel confident letting consumers take control of the checkout process.”

When the store employee scans the bar code presented in the consumer’s app, the system checks to verify if the transaction happened recently or if it was made before, among other factors, Keith says. An image of the receipt also is presented to the store employee. “It’s just as important for the shopper to feel they’re not doing anything wrong,” Keith says.

Oglesby predicts that self checkout will win adoption: “Self checkout will eventually have its day, it’s just a question of when.”