If a marketing opt-in question is posed, who is posing it? And how will customers react when they later learn they weren't sharing with whom they thought they were sharing? Bad news: This is not hypothetical.
There is a broader issue at play here. With any of the third-party mobile payment efforts—Google Wallet, PayPal, ISIS, maybe even Apple—there is the potential for this type of confusion. If it's a Macy's-branded phone being offered by a Macy's associate inside a Macy's store, and if the mobile screen asks a permission question, is that Macy's asking or Google Wallet asking?
In this particular E-mail address situation with Square, though, it's mostly limited to Square; most of the other players require the consumer to have an account, which means they presumably already have that consumer's E-mail address.
At the NRF show in New York City this month, IHL President Greg Buzek was running a charity event. (The charity is the Retail Orphan Initiative, known as RetailROI, and it's quite worthy of support. But I digress.) At the event, lots of retailers were making contributions to help the global orphan efforts and the charity was using Square sleds on mobile devices to process the donations.
The Square interface asked people for their E-mail addresses and many obliged, thinking this was opting into future communications with the charity. But the charity never saw any of those E-mail addresses. They went to Square, and there they stayed.
"People entered their E-mail addresses for receipts and we were stunned to learn that not only were the E-mail addresses not in any reports, there was no option for the donor/customer to opt-in or opt-out," Buzek said. "A lot has been made about the disruptive nature of Square, particularly among small merchants. However, if the merchant cannot build its customer base and stay in contact with them, the lower cost of processing comes at a huge price. I would surmise that most all consumers, if they give their E-mail address to a retailer for a digital receipt, assume that the retailer will use that E-mail to stay in touch. The fact that there is neither an opt-out nor opt-in option for the customer during the transaction not only leads to confusion but disappointment."
From Square's perspective, the situation is quite different. The company is handling the transaction and it seeks only the E-mail address so it can send the electronic receipt. An opt-in for future communications is simply not an issue, said one Square representative.
"We do not save customers' personal information on merchants' devices or accounts for security purposes. If they choose to provide an E-mail address during a transaction, they are doing so under the impression that it will be used for a receipt and a receipt only," the Square representative said. "Based on our privacy policies and governing regulations, we cannot share cardholders' personal information with (retailers). We are creating a feature that would allow a customer to opt into having their E-mail address or phone number saved, but we don't currently have a timeline for when this will roll out. In the meantime, any collection of customers' names, E-mails or other personally identifiable information will have to occur outside of Square."So even when this feature is launched, it will solely be a way for Square to collect and retain data. This is crucial information. In short, those questions are coming from Square and do not represent the retailer. But your customers will assume and believe the opposite, that you are asking the questions and that you are receiving the answers. As Buzek discovered, perceptions are often not reality.
In this instance, the intent of all of the parties seems to be noble. But that won't last long in retail. Should you insist on having your own interface atop the one from the third parties so you can control the data flow? At the very least, you need to train associates to make sure customers understand that the retailer is not asking any of those mobile questions.
The idea of data ownership during retail mobile activities—where third parties play larger roles than is typical—is hardly new. McDonald's struggled with this issue some four years ago, during one of the earliest mobile coupon trials.
The issue of data ownership is going be crucial. Control of this data is the most valuable asset the third-party players will have. Indeed, they'll have access to data about what the consumer is doing with a large number of competing retailers. The CRM data troves will be huge, they will be used however the third parties choose to use them, and not only will you likely have access to none of that delicious CRM but you'll also be blamed for privacy intrusions the consumers discover. How's that for a worst of both worlds scenario?
The whole point of many of the mobile payment trials this year, however, will be seamless integration. It will be designed to be as much of the normal retail environment as a POS card swipe is today. The difference is that today's card swipes really are controlled by the retailer, with the POS vendor in the background. The initial mobile models flip that around. That's not necessarily a horrible thing. But it's something to be aware of and to consider during every element of deployment.