Innovative Retail Technologies

MAR-APR 2017

Innovative Retail Technologies (formerly Integrated Solutions For Retailers) is the premier source for innovative yet pragmatic technology solutions in the retail industry.

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Page 34 of 39

Are You Ready For Location-Based Payments? A t the Location Based Marketing Association (LBMA), we are heavily engaged in the use of proximity technologies for the retail sector. Much of the conversation these last few years has focused on indoor positioning technologies such as Wi-Fi and Bluetooth beacons to push coupons and offers to consumers when they are in or near the store. The use case, however, is shifting, as a growing number of merchants and con- sumers are turning toward mobile-based proximity payments given the imminent efficiency and convenience. It's not just about using location to drive traffic to your stores, or even about engaging them with an offer when you know they are there. To complete the loop, this needs to be integrated with the transaction layer, and that's where prox- imity payments can play a big role. According to eMarketer's U.S. Mobile Payments Forecast, the transaction value of proximity payments was expected to triple in 2016 due to broader merchant acceptance and a larger number of consumers using their phones to make point-of-sale payments on medium- and high-priced products. NFC (Near Field Communication) and iBeacon are two of the most popular technologies when it comes to proximity payments. How Do These Technologies Work? Beacons — BLE (Bluetooth low energy) beacons power wireless data transfer by consuming minimal amounts of power. These devices continually relay a discov- ery signal that is received by BLE-enabled smartphones within the range of trans- mission — which is approximately 230 feet. Most smartphones today support BLE, although it is necessary to have the phone's Bluetooth enabled in order to receive the signals from a beacon. NFC — NFC is a short-range, wireless link that has evolved from radio-frequency identification (RFID) technology and can transfer small amounts of data. NFC tags communicate with NFC-enabled smart- phones only when they are placed within close proximity of each other (optimally under 4cm). Differences In User Experience Beacons — Beacons essentially allow a one-to-many experience, where one beacon transmits signals that are picked up by all the phones within the beacon's range. When a consumer's BLE-enabled smartphone is placed within the range of the beacon, it receives and measures the signal strength in order to calculate the approximate distance from the beacon. The operating system of the phone then extracts the beacon ID and makes the ID available to the appropriate app on the phone. After these steps are completed, the app decides on the next course of ac- tion based on the user's location. NFC — NFC is a one-to-one experience. A user must first identify an NFC tag, which is usually attached to an object. The user is then required to place his NFC-enabled smartphone close to the NFC tag (usu- ally within 4cms). Radio waves from the smartphone awaken the microprocessor of the NFC tag. Once the processor is powered up, a stored program is execut- ed to transfer the contents of the tag's memory to the smartphone. The smart- phone then executes an action based on the content received. How Payment Processing Happens Beacons — Upon entering a store, a consumer's payment app identifies the beacon signal and alerts the merchant's Why and how a growing number of merchants and consumers are turning toward mobile-based proximity payments. BY ASIF KHAN I FOUNDER LOCATION BASED MARKETING ASSOCIATION Mar-Apr 2017 32 Leading beauty brand, Sephora, recently piloted beacons together with mobile wallets. What's Next

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