When CVS last week (Aug. 11) rolled out its in-store mobile payment app, it was the latest example of the front-loading approach to mobile payments. That's where you let shoppers do as much as possible within the payment app long before they get to the top of the checkout line. That way, what they perceive as the payment part can be as quick and painless as possible. Good move, CVS.
But the CVS app couldn't fully front-load the payment process due to the complicated nature of pharmacies. For example, there are payment options that can only be used in pharmacy — such as a federal health savings account (HSA) debit — but only for a very limited number of items. That means that shoppers have to make that time-consuming choice standing in front of the POS associate, defeating a lot of the convenience that CVS has worked so hard to achieve.
"All verifications for prescriptions and payment like name/birthdate, signature, and PIN take place directly in the app, so transactions are hassle free," CVS said. Not quite. At best, they simply made the hassle happen earlier — and they couldn't even completely do that.
CVS argues that this can also be seen as an advantage. (When mobile payments gives you lemons…) "With the pharmacy involved, people will regularly want to switch back and forth between payment methods. You can’t use your HSA to buy shampoo, for example, so a customer will definitely want to use their credit card at the front store," said CVS spokesperson Mallory Thompson. "But they will want to pay with their HSA at the pharmacy. Having the flexibility at the time of payment makes it easier for them to go back and forth between those options in the store."
Looking at it from the shopper's perspective, though, this just makes for a very awkward system. Compare the CVS in-store experience to one at any major e-tailer, including Amazon and — just to make the point — CVS.com. Why not permit shoppers to make all of their purchases — prescriptions along with shampoos, school notebooks, aspirin and bottled water — at one POS?
And if all payment options are in that mobile app, why not allow the shopper to assign different payment methods for different SKUs and work it all out while standing in an aisle — allowing the POS transaction to be almost instant? Happier shoppers making that purchase, happier shoppers standing behind that shopper and happier store associates. Win, win and win.
To be fair, CVS has indeed crammed a lot of payment goodies into its app, albeit nothing that other major chains haven't already delivered. It merged payment with prescription pickup plus its loyalty program. "Customers will have the ability to refill, manage multiple prescriptions and get alerts when prescriptions are ready, all within the app and then pick up and pay using a single barcode," said the CVS news release. "Customers can also link their ExtraCare card with CVS Pay, meaning a single scan at checkout will process all ExtraCare deals, earn new rewards and handle payment for the transaction."
CVS did manage to get one element delivered far better than one of its well-known fellow retailers: drive-through orders. When ordering items in the store, shoppers display the barcode shown on their phone. But when driving into the pickup window, they can pay by merely reading aloud a pickup number. Could someone please explain the wonderfulness of this simplicity to McDonald's, which still makes Apple Pay shoppers engage in a ludicrous and self-defeating wrestling match with an associate struggling to hold a POS out the window as shoppers tries to balance their phones right next to it, for an NFC handshake. It's a comic opera to behold.
"CVS Pay is currently available in select markets, including New York, New Jersey, Pennsylvania and Delaware and a nationwide rollout is expected to kick off later this year," the CVS statement said. It added that the app "is available on iOS and Android devices, the same platforms the CVS Pharmacy app is available on today, and works with all major credit (MasterCard, Visa, Discover, American Express), debit, Health Savings Account, and Flexible Spending Account cards."
CVS could have gone another way, though. If you remember to the earliest days of Visa and MasterCard, the whole point was that a shopper could have one card that would work in a huge number of stores. Does CVS really want to encourage a world where shoppers have 48 apps on their phones to handle all of their retailers? Would a visit to the mall require downloading the apps of every merchant you might visit?
Like it or not, the better overall mobile app approach is to get behind the leaders within iOS and Android and accept those apps. But if you're going to fragment the market and make it more difficult for people to buy your products, the CVS app appears to be a decent first attempt.
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