Retailers should determine how new mobile payment systems will work within the structure of their business, rather than fret over the specifics of the technology, says Jamie Henry, senior director of payment systems at Wal-Mart Stores Inc.

"Mobile [commerce] is not a technology question, it's a business model issue," Henry said during a panel discussion April 16 at the annual Ramp Advanced Commerce and Mobile Retail Summit in Chicago.

Walmart doesn't want to take the current card-based model and simply move it into a mobile world, Henry says. It would prefer a system that lowers costs and improves security.

"We don't want to hear about a slick technology that leverages a current system that we don't like, plus they will take our data," Henry says. "That's just a non-starter."

For Walmart, the proper mobile payment system will lower costs enough for the retailer that it can in turn lower its prices for shoppers, Henry says.

Mobile transactions will be expensive as long as they are considered card-not-present transactions, says Scott Moeller, CEO of mobile commerce provider MShift.

"We have an opportunity to reduce fees that merchants pay [with mobile development] and if there is no forward movement in that area, we will fall into an inertia in which everything stays the same," Moeller said at the event.

Gary Eppinger, vice president of retail market development at Supervalu, agrees that price plays a vital role in a retail business plan.

"Lowering the interchange rate gives us an opportunity to invest in emerging technologies," Eppinger said at the event. "How to drive those rates down is a big deal for us."

While many U.S. retailers are waiting to see which mobile technology comes to the forefront, most have to also deal with the card networks' expectation that they accept EMV-chip cards by October 2015.

But that conversion is not sitting well with many retailers, the panelists say.

"EMV is very applicable in the card environment, but falls short in the mobile environment," Henry says. "We feel it is ridiculous to take the EMV approach when more intelligent systems are in place."

Many "really exciting" mobile payment systems that function as a "closed loop redemption system from wallet to transaction" are unfolding in the market, says Jack Philbin, CEO and co-founder of mobile commerce provider Vibes.

Philbin points to Apple Inc.'s Passbook as redefining the mobile wallet to being more about payment card and coupon storage and convenience, rather than about the actual transaction.

However, the payments and commerce worlds "will converge" at some point to bring mobile to the forefront of a total consumer experience of secure payments and storage and use of payment cards, coupons and loyalty programs, Philbin says.

In speaking about establishing business models that make mobile technology a key part of the strategy, Dave Baldwin, president of ValuePay Services LLC, which operates the Subway Card for the Subway sandwich chain, says his company looks at mobile as a "brand in the hand."

"Everything we are contemplating has to be mobile, and our brand has to be in the consumer hand at all times," Baldwin says.

Subway has to also consider how a mobile wallet reduces valued personal interaction by allowing customers to order ahead of their visit to the restaurant, Baldwin adds.

"That's the challenge," he says.

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