Proximity Mobile Payment Usage Is the Future of Retail

Oct 28, 2021

In the near future, your customers might expect to pay with their watch, their ring, or even the palm of their hand. Read on to make sure you’re prepared for that future.

Andrew ConradSr Content Writer
Proximity Mobile Payment Usage Is the Future of Retail

Wouldn’t it be great if you could leave your house with just your phone in your pocket and not have to worry about cash, credit or debit cards, tickets, or even your keys? That future isn’t far off in the proximity mobile payment industry, especially for retail customers. 

The future of digital payments includes technology like proximity mobile payments, wearable and contactless payments, and even location-based discount offers.

You may have heard of, or even made, a proximity payment if you’ve used the mobile wallet on your phone to scan a credit card, airplane ticket, or concert ticket, for example.

As a retailer, your customers aren’t realistically expecting you to accommodate all of these emerging technologies right now. But what about five years from now? It is possible that customers will expect retailers to have the latest payment technologies in their stores. 

Customers are expecting to use their mobile wallets, and 92% of retailers have either implemented that technology or are planning to according to our recent Retail Comeback survey (methodology below). Read more about that technology here.

In this article we’ll take a closer look at proximity mobile payment technology so that you can prepare for what’s coming. 

But first, let’s dive into what a proximity mobile payment is. 

What is a proximity mobile payment?

A proximity mobile payment is the transaction that a customer can initiate with their mobile phone or other smart device using near field communication (NFC), or a QR code, to pay for goods and/or services. Most modern mobile phones are already equipped with NFC technology, but a retailer’s point of sale system must also be equipped with NFC to accept these payments.

Benefits of proximity payment usage include contactless transactions, consumer convenience, and enhanced credit, debit, and cash security. 

Now that we have that covered, let’s look at three futuristic applications for proximity payments.

1. Wearable proximity payments

You may be familiar with the concept of waving your phone across a point of sale scanner to make a payment, perhaps with Apple Pay or Google Pay. But the future will see customers simply tapping the watch on their wrist or even a ring on their finger to make these same types of transactions.

According to our Retail Comeback survey, 17% of retailers are already using wearables in their business while an additional 37% are in the process of rolling wearable technology out. It should be noted that the usage referenced in that survey could be anything from equipping employees with smart watches to providing AR headsets in stores.

Curious what a wearable proximity payment looks like in action? Check out this video of a customer using a contactless ring to make a payment:

Using My Smart Ring To Pay! (Source)

How you can prepare for wearable proximity payments: The best way to make sure that your business is prepared to accept payments from devices like watches and rings (and who knows what else Silicon Valley will dream up in the next decade) is to make sure that you have a modern point of sale system with an up-to-date contactless scanner. Browse our Category Leaders in Point of Sale to find top rated systems with scanners ready to handle payments now and in the future.

2. Location-based offers

What if you could hook a repeat customer by pushing a notification to their smartphone when they’re near your store? In the proximity mobile payment market, this is possible thanks to GPS and geofencing built into mobile devices. So as not to annoy uninterested customers, be sure to let them opt in to notifications when they make a purchase, and give them an option to opt out each time you send them a message.

For example, in Europe, the GDPR requires that marketers get explicit consent from consumers (it’s not enough to bury a disclaimer in an app download agreement) before sending them marketing messages. The rules aren’t quite as clear cut in the U.S., and can vary from state to state. But in general your messages will be better received, and more effective, when the recipient has freely agreed to receive them.

You can sweeten the deal by offering discounts for their permission.

Here are some ideas for the types of messages you can send your customers:

  • Sales on previously purchased products

  • Suggestions for new products based on previous purchases

  • Reminders to resupply consumable products

To learn more about location-based marketing, check out this video:

How geofencing works: location-based marketing for small businesses (Source)

How you can prepare for location-based offers: If you like the idea of sending out location-based offers, a good place to start is with a beacon. A beacon is a small device that is capable of sending messages to mobile devices in a given area via radio signals. Used in conjunction with your marketing software, these beacons use Bluetooth technology, so they work well even in areas with poor cellular service. 

3. Palm-based proximity payments

What’s better than a contactless payment using your phone? How about a contactless payment using nothing but your hand. You read that right. In the near future, customers will be able to wave their palm across a scanner like a Jedi to make a payment in your store.

Amazon is pioneering this technology—their version is called Amazon One—that uses a one-of-a-kind palm signature made up of a palm print and vein pattern to identify customers. Users only need a credit card number and a phone number (and their palm, of course) to sign up. So far, it’s only available in select Amazon Go and Whole Foods stores across the country, but the technology could eventually enjoy a large-scale roll out.

“We believe Amazon One has broad applicability beyond our retail stores, so we also plan to offer the service to third parties like retailers, stadiums, and office buildings so that more people can benefit from this ease and convenience in more places,” says Dilip Kumar, Vice President, Physical Retail and Technology for Amazon.

Check out this video from Amazon to learn more:

How you can prepare for palm-based proximity payments: Amazon is actively looking for interested third-party businesses to pilot their new Amazon One palm scanning technology. Amazon recently announced its first third-party Amazon One client, digital ticketing company AXS, so it’ll likely be awhile before you see retailers implement mobile proximity technology in stores. But if successful, the rollout could be swift, so it’s never too early to prepare.

Prepare for customers of the future with a modern POS

Payment method growth that now includes watches, rings, and palms is a cool vision of the future. It's best to familiarize yourself with the proximity mobile payment market, as it could be a reality sooner than you realize.

But if you haven’t updated your point of sale system in recent years, you may already be missing out on modern, convenient features (and sales) like real-time inventory management, loyalty programs, and mobile payments, just to name a few.

Our Point of Sale Buyers Guide can tell you everything you need to know about modern POS systems, from common features and average costs, to recent trends in the POS market.

Then, when you’re ready to browse some POS systems, check out our Category Leaders in Point of Sale to look at 15 top rated systems based on verified user reviews.


GetApp conducted the Retail Comeback survey in June 2021 of 703 U.S.-based retailers and restaurants to learn more about how they’ve pivoted their businesses in the area of fulfillment and alternate payment models. Respondents were screened for leadership-level roles in the retail and restaurant sectors.

About the author

Andrew Conrad

Sr Content Writer
Andrew Conrad is a senior content writer at GetApp, covering business intelligence, retail, and construction, among other markets.

As a seven-time award winner in the Maryland, Delaware, D.C. and Suburban Newspapers of America editorial contests, Andrew’s work has been featured in the Baltimore Sun and PSFK. He lives in Austin with his wife, son, and their rescue dog, Piper.
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