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The idea is not skipping the cashier, it is improving the customer experience

Interview with Mustafa Khanwala, CEO and Co-Founder of Mishipay

European Business: Mishipay radically simplifies the everyday shopping experience by allowing customers to scan and pay for their products with their phones and then walk out of the store, eliminating the need for supervised cash registers. How does your technology work?

Mustafa Khanwala: The best way to explain it is probably from the perspective of the shopper. As a shopper, you walk into the store, you look at an item you like and you want to find out more about it. You can then use our Mishipay app or our web service to scan the marker on the item and instantly get all the details of the product. At a minimum, the item’s name and price are displayed, but often we can also show you a picture of it as well as online stories and reviews. You can add as many items to your cart as you want and once you’re all done, you can pay for your purchases with PayPal or Apple Pay or with credit or debit cards. Once your payment has been processed, you get a receipt with a QR code on the app and you’re free to take off. There is literally nothing else to do: just scan, pay and leave. That’s it.

European Business: How does your technology make sure that customers don’t just leave the store without paying?

Mustafa Khanwala: Our technology has an anti-theft element, so if someone tries to steal an item, Mishipay will immediately catch them, because our sensors are connected with the Mishipay system and we know whether the item has been paid for or not. In case the item has been stolen, Mishipay recognizes this within 100 milliseconds and will immediately sound the alarm. The moment you pay, the security disables automatically.

In Germany for instance, cash is king and retail transactions are still carried out with cash 80% of the time. In the Nordic countries, especially in Sweden, however, people rarely use cash. Mustafa KhanwalaCEO and Co-Founder

European Business: There are already numerous examples of physical stores which have got rid of cashiers through automatic payment systems, mostly in the Anglo-Saxon world, whereas this technology has not been as widely implemented in continental Europe. Why does the Anglosphere seem more open to such processes of digitization?

Mustafa Khanwala: Today, this technology is even more widespread in Asia, and in China in particular, than in the United States and in the UK. I believe that there are several factors which explain some of these regional differences: among them the willingness of customers to pay with cards and with mobile payment systems as well as their levels of trust in these systems. Already within Europe, there are huge differences: In Germany for instance, cash is king and retail transactions are still carried out with cash 80% of the time. In the Nordic countries, especially in Sweden, however, people rarely use cash.

What is also important is the notion that this technology must be as easy to use as possible. Take self-check-out counters where customers scan their own items in lieu of a professional cashier. That model is broken, because it cannot really function at any time: Self-check-out counters do nothing to prevent long queues during peak times, because regular people are slower at scanning their items than a professional cashier. And during off-peak times, nobody is using them and they are just wasting away on the retailer’s balance sheet.

European Business: One key concern many customers have when it comes to innovative payment methods is data protection. How do you ensure that your company meets the high European data protection standards, and would your service profit from more lenient regulation?

Mustafa Khanwala: I believe that with GDPR (General Data Protection Regulation), Europe is definitely the world leader in data protection. Nobody in the world has legislation on a comparable level. Some of this, no doubt, creates more work for us, since we have to make sure that everything we do is GDPR-compliant, and we require substantial legal expertise to make sure that it in fact is. I believe the benefit for us as a younger company is that we don’t have too much legacy. It was much easier for us to become GDPR-compliant than for many of the big banks. The point of GDPR is not that you cannot use data to create better experiences for shoppers anymore, but that you have to do it with the consent of the shopper and you have to do it in a safe way. And we agree with that completely.

The point of GDPR is not that you cannot use data to create better experiences for shoppers anymore, but that you have to do it with the consent of the shopper and you have to do it in a safe way. Mustafa KhanwalaCEO and Co-Founder

In our Saturn Express in Innsbruck, Austria, the first cashier-less store of Europe which we launched with MediaMarkt Saturn, a very strong majority of users opted in to receive more emails and more information, because we informed them beforehand and because we were able to convince them that they would benefit from this service.

European Business: What were the biggest lessons you learnt from your store in Austria?

Mustafa Khanwala: I often joked that working with a large German retailer made us better, because everything has to be perfect for Germans. Besides, the Saturn Express in Austria was the first store which relied exclusively on Mishipay as a payment method, and we had to be really fast in implementing our technology there. Even though GDPR is in effect across Europe, countries differ in the way in which this regulation has to be implemented. In Austria for instance, customers have to opt in explicitly for a company to be allowed to send them emails: So the box must be left un-checked and cannot be checked in the default position.

We also learnt how we have to change our messaging and the way we talk about the app from country to country. We realized that the important point of our messaging is not the idea of skipping the cashier. It is more about improving the customer experience. Now, we had never said anything other than that, but it was very important for us to clarify this position: We’re not saying that there is no need for anyone to work in the store anymore. What we are saying is that the staff can do much more than just be a cashier and that they can instead help the customers with whatever they need help with, be that further information about an item or bagging their goods.

European Business: One could argue that your innovative technology could soon become redundant if online shopping were to make physical stores a thing of the past entirely. Is your company a bet against that?

Mustafa Khanwala: I truly believe that shopping in a physical store brings people joy. It brings a smile to their faces, it makes them happy. This is at risk of going away in the world. If stores don’t innovate fast enough, they will disappear. And I don’t want to see physical stores disappear. But retailers now have to think hard and innovate. Markets like Saturn and MediaMarkt are ideal for this, because they can be role models for other stores.

Interview: Julian Miller, Photos: Mishipay

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