COUPLING MOBILE PAYMENTS AND CRM IN THE RETAIL INDUSTRY Jan Ondrus INFORGE – Ecole des HEC University of Lausanne, Switzerland jan.ondrus@unil.ch Yves Pigneur INFORGE – Ecole des HEC University of Lausanne, Switzerland yves.pigneur@unil.ch ABSTRACT The growing prevalence of electronic commerce and the widespread use of mobile devices have made mobile payments an interesting alternative method of payment for customers and merchants. One major issue to be resolved is the integration of a real-time wireless means of payment within their current payment system. In this paper, we propose an architecture of mobile payment system to improve business processes and increase customer loyalty. An all-in-one device that enables mobile payments and also integrates a membership scheme would simplify and significantly accelerate the payment process at the point of sale (POS). Moreover, the deployment of an effective customer relationship management (CRM) system and an adapted data mining tool would allow retailers to propose a dynamic-generated website to their customers. This would follow a one-to-one e-marketing strategy and would improve companies’ ability to suggest customized offers and coupons. KEYWORDS Mobile payments, retail, CRM, customer loyalty. 1. INTRODUCTION The continued release of new technology constantly pushes retailers to update their POS - the place and moment in a store where a customer pays for merchandise (Jensen 2001). A recent survey shows that 41 percent of the retailers interviewed have replaced their POS package within the last two years (Retail Systems Alert Research Services 2002). This indicates that there is a real incentive for the retail industry to invest in information technology. In addition, the new functionalities of the POS are growing since they are embedded with operating systems such as Unix, Linux and MS-Windows. Moreover, the increasing general enthusiasm on mobile technologies such as Bluetooth and radio frequency identification (RFID) has a positive effect on the acceptance of new mobile applications and services. This would explain why wireless POS solutions are already on their way to arrive at your local retailer. Contactless payments and ticketing are becoming a new trend for quick-service oriented industries (Moore 2003) such as public transports (e.g. Public Transport Pass), toll booths (e.g. FasTrak), gas stations (e.g. ExxonMobil's Speedpass) fast-food restaurants (e.g. McDonald's) and ski resorts (e.g. Swatch Access). Therefore, an architecture in the retail industry combining mobile technology and traditional commerce techniques has the potential to generate some significant benefits for the merchants and their customers. For example, the payment process would be faster, easier and more secure. As a result, waiting time at the POS will be shorter, so customers would not have the impression that they waste precious time waiting in lines.