Speaking at the Cannes Lions International Festival of Creativity today, Schmidt said he believes one-third of all restaurants and retail outlets will allow for mobile payments within the next year, the Financial Times reports him as saying. He reportedly told those in attendance that that number should be enough for widespread adoption of mobile payments.

“I judge that based on how long I think it takes, because the terminals are available now, the software is available now or this summer,” the Financial Times reported Schmidt as saying. “How long does it take an infrastructure player to upgrade a significant percentage of their infrastructure–it’s on the order of a year, it’s not a week, it’s not a month but it’s also not five years. It’s an educated guess.”

Schmidt, who stepped down as Google CEO in April, has a vested interest in seeing more establishments allow for mobile payments. Late last month, his company unveiled Google Wallet, a service that uses near-field communication (NFC) to let users pay for purchases with their Android-based devices. Google said it will be partnering initially with Sprint, MasterCard, Citi, and FirstData on the service.

Google Wallet will be available on the Nexus S and will work with “a PayPass-eligible Citi MasterCard and a virtual Google Prepaid card.” The search giant was quick to point out that there are currently more than 124,000 PayPass-enabled merchants in the U.S. and more than 311,000 operating around the world.

Google said last month that all future Android smartphones will be NFC-compatible. Rumors suggest the next iPhone will also feature NFC technology.

But as Schmidt pointed out today, support for NFC in devices is just one piece of the mobile-payment puzzle; payment processors must also double down on the technology. However, Schmidt isn’t worried about that happening for one major reason: “fraud rates are so much lower” with the use of NFC, he said.

“Nobody knows how quickly this will occur,” Schmidt said of credit card companies updating payment terminals with mobile-payment support, “but it’s in their interests to convert as fast as they humanly can.”

IN THE film Minority Report set in 2054, a brewer’s advertising billboard identifies Tom Cruise’s character, John Anderton, through a retinal scanner. As he walks past, the billboard calls out: ”John Anderton! You could use a Guinness right about now.”

Far-fetched? Not according to retailers who believe this type of targeted advertising may well be the future of shopping.

New York company Immersive Labs is already using built-in cameras and facial recognition software in its outdoor billboards to determine the gender and age of passers-by so it can customise the advertisement on display to suit them and prompt sales.

As Australian online shopping – expected to be worth $21.3 billion this financial year and $30.8 billion by 2015-16 – continues to threaten bricks-and-mortar businesses, retailers are using the latest technology, combined with social media, including more shopping apps, to lure customers back into their stores.

German shoemaker adidas is planning to install touch-sensitive display walls in stores from next year. The virtual footwear wall will allow customers to view the company’s entire range of 4000 pairs of shoes. If a customer likes a particular shoe the store will order it in.

Two cameras above the screen will watch shoppers’ reactions to determine which shoes are most popular. And like other companies, adidas is also gathering feedback by encouraging customers to use Facebook and Twitter to review its products.

Brisbane company Yeahpoint believes its MiMirror creation is the missing link between instore shopping and social media that will revolutionise fashion retail.

MiMirror is a touch-screen display with a camera that acts as a mirror and takes up to six photographs of customers in outfits they are considering buying. The shoppers then email the images to friends or post them on Facebook to get a second opinion.

No retailers have installed the technology yet, but the company is confident major stores will buy the device in coming months.

”The factors driving retailers’ decisions for the future are basically that the cost of business continues to increase and competitiveness in the retail environment is being challenged by the online market,” Yeahpoint’s John Anderson says.

”On the flip side, you have the time-poor consumer who wants to have a much more friendly, fun shopping experience.”

Sean Sands, of Monash University’s Australian Centre for Retail Studies, agrees, saying many consumers are bored with traditional retail and the only way to lure them back into stores is to offer the latest technology linked to social media.

A recent report released by the centre found that online shopping was creating tougher in-store customers because they were ”better informed due to the power of the internet”.

Half the population now research their purchases online before setting foot in a store.

Many are also armed with a wide range of shopping apps that can be downloaded on to iPhones, iPod Touches, iPads and other tablets and smartphones, that allow them to hunt for the best deals.

The RedLaser app, for example, allows instore shoppers to scan the barcode of an item to get the price and then checks online to see if it’s cheaper elsewhere.

Supermarket giant Coles’ ShopMate app, which notes specials and lets you cross off your shopping list as you go, has been downloaded 400,000 times.

Rival Woolworths does not have a shopping app but has one to locate missing trolleys.

Woolies’ app-lessness is not likely to last, however, as retailers respond to consumer demand.

Russell Zimmerman, of the Australian Retailers Association, says ”every retailer has to be in the online space in the foreseeable future” or they won’t survive.

According to PayPal, 8 million Australians buy goods using the internet, and one in 10 buy them with their mobile phones.

Google Australia’s head of retail, Ross McDonald, says this increasing use of mobile phones to search for stores and products has become a noticeable trend in the past six months.

Previously, 95 per cent of online traffic for shopping searches was from computers but 16-18 per cent of online inquiries were now from mobile phones. ”What we advise retailers is that it’s not so much about the app but making sure you are visible on a mobile device when someone searches for you,” he says.

Jo Lynch from Myer – which has an iPhone app that lets you peruse and buy goods with a tap of your finger – says the company expects its online business to generate sales of $5 million for 2010-11 and be worth up to six times that in the next few years.

David Jones’ Brett Riddington says the future of shopping is all about multi-channel retailing. ”Many customers will still want to go in-store to physically see the goods after checking them out online, but we need to make that a more entertaining and engaging experience,” he says.

From large retail chain stores to local businesses, more and more merchants are offering gift cards as an option for their customers. Gift cards are a valuable tool which can be used to build awareness, increase revenue and profits, introduce new customers to your business and eliminate cash refunds keeping the money in your business.

Federated Payment’s CEO, Jon Levitt, explains, “Offering gift cards to your customers is a highly profitable business strategy. If you purchase a packet of 100 gift cards and your average gift card sale is for $50, the business could potentially generate $5,000 in revenue. If you run at an average of a 50% profit margin, you have just earned $2,500 of pure profit in your pocket. Plus, once a customer purchases a gift card, the money is yours, even if the card goes unredeemed.”

John Guirguis, Federated’s president, adds, “Federated Canada makes integrating gift cards into your business a fast and easy option. From creating cards with your customized logo to account activation to instant retrieval of all card information, we provide our merchants with a turnkey, value-added solution to increase their revenue stream.”

About Federated Payments Canada
Federated Payments is a leading international provider of processing solutions and related services for independent business owners in Canada. Federated takes a consultative approach in developing long-standing relationships with our merchant customers, Independent Sales Offices and Cash Advance Partners enhancing the way they do business. Federated offers a diverse suite of cost-effective solutions that include credit and debit card processing, equipment leasing, gift and loyalty card programs, cash advances and check approval services as well as its industry-leading Agent Partner Portals. Headquartered in Ottawa, Ontario, Federated Canada is a single source for the full range of electronic payment services. For more information, visit at www.federatedcanada.ca .

“But Juniper believes that mobile campaigns must be tightly linked to print, online and store based campaigns to ensure consistency of customer experience.

Increasingly people will browse on one device such as a PC and then buy from another such as a smartphone,” he added.

The report found that there was an increasing awareness in the industry of the need to enable an integrated shopping experience within the wider context of a fast expanding e-commerce market.

Other key findings from the research are that the market will gain further momentum in the medium term following the increasing deployment of POS (point of sale) solutions to facilitate in-store [NFC-style] cashless transactions.

It also identified a major industry benefit – namely that retailers have discovered a marked uplift in average transaction value when cash is replaced by a mobile payment method.

In the report there are of some 17 mobile payments vendors and offers guidance for readers to pinpoint their strategies.

An on-site nutritionist: The company has hired a professional nutritionist who will be available for consultations. The cost, according to Robinson, will be $25 an hour, but the customer will get that $25 back in the form of a gift card.

Day care services: Stop & Shop is introducing “The Tree House” – a room where supervised day care is provided for up to 90 minutes for free, for children ages 3 through 9.

Curbside pickup: Customers will be able to order groceries on a computer and pick them up at the store without leaving their cars. They can pull up to a designated curbside pickup area where a Stop & Shop employee will process the payment and load the shopper’s car.

Mobile payments’ progress has been held back by the sheer number of vested interests battling to take the upper hand in driving the platform. This is seen best in the US, where the main parties each have one or more initiatives – three of the top four cellcos in Isis; Google Wallet; schemes led by the credit card giants such as Visa; and separate programs by PayPal and others. Now the retailers, too, want a say, and about 25 stores, including Walmart and Target, have formed a consortium to develop their own m-payment system.

According to a report in the Wall Street Journal, citing several unidentified sources with direct knowledge of the deal, the retailers are eager to limit the influence of either Google or the operators in this area. They would have various advantages in bringing store-based mobile payments, such as NFC-enabled systems, to market. They have an existing trusted brand for consumers, and would get round one of the major blocks in NFC’s path – merchant indifference or unwillingness to deploy terminals.

There are few details as yet, but Target said in a statement to the WSJ: “We are exploring potential solutions that would help us to deliver the fastest, most secure mobile-payment experience possible for our customers.”

However, Google claims 22 large US retail chains now support its Wallet initiative, even though that suffered recently from security issues, and is available only on the Sprint network and the Samsung Galaxy Nexus handset. Google is working with MasterCard and its PayPass network, while Isis is working with most of the major card processors, including Visa, MasterCard and Amex, and will start trials of its services this year.

Brands like Café Coffee Day, Pizza Hut, Provogue, Kaya, Fastrack, Gili and a host of others have launched prepaid cards. A prepaid card works like a debit card with a PIN number that can be redeemed at the brands’ outlets. The cards in India are based on the closed loop model — that is, they can be redeemed only at the brand’s stores. “When I have money loaded on the card, the tendency to come to the same place is higher,” says K Ramakrishnan, marketing president at Cafe Coffee Day. The brand’s card Cafe Moments, launched this month, offers a 5% bonus on cards with a value of Rs 100 to Rs 499, 7% on Rs 500 to Rs 999 and 10% on Rs 1,000 and above.

A prepaid card obviates the need to pay cash every time, and it also enables faster accumulation of bonus points or other offers. Prepaid cards in India are currently being used more as gift cards. Some brands have used it to launch a promotion or a service. What the prepaid gift card did for Kaya was to generate incremental walk-ins,” says Suvodeep Das, marketing head at Kaya Skin Clinic. In Kaya prepaid cards, currency can be reloaded in multiples of Rs 500 to up to Rs 2 lakh. Kaya sells about 250-300 gift cards a month.

Global Prepaid Exchange recently estimated that the size of the organized prepaid gift card and gift voucher market in India is Rs 2,000 crore and would grow to Rs 8,000 crore by 2015. “The acceptance of gift cards in proportion to vouchers has increased significantly,” says Pratap T P, chief marketing officer at QwikCilver Solutions, a provider of prepaid card solutions.

However, Devangshu Dutta, CEO of retail consultancy Third Eyesight, says growth in prepaid cards would be restricted by the fact that they can be used only at a particular brand’s outlets. “Also, a customer cannot claim the minimum residual value in the card. He will have to top it up to redeem it,” he says.