![5G Communications Could Change the American Retail Landscape [2023 Update]](https://stage2025.hostmerchantservices.com/wp-content/uploads/2019/11/5g-communications-624x416.jpg)
In terms of telecommunications and payment transactions, the United States is strangely out of step with the rest of the world in some aspects. Paper checks, for example, are still used by many companies. The adoption of EMV technology by American retailers was slow enough to cause anxiety among providers of payment processing services. As for the fifth generation of wireless technology, commonly known as 5G, South Korea and China are examples of significant markets that rolled out 5G networks way ahead of the U.S.
How 5G Will Impact Brick-and-Mortar Stores
In major metropolitan areas such as Atlanta, wireless service providers have already upgraded their infrastructure to 5G. Widespread upgrades to 5G technology will take place over the next few years, and retailers have everything to gain from this development. In essence, 5G networks are able to handle vast amounts of data at much higher speeds; while it is easy to see how e-commerce operations can benefit from this technology, it is important to note that brick-and-mortar retailers will also be able to capitalize on this upgrade.
Retail storefronts do not have to compete against e-commerce because they can simply embrace it. With the advent of 5G, however, brick-and-mortar stores can give their e-commerce counterparts a run for their money through interactive experiences. Augmented reality features, for example, can let shoppers get more information about products on shelves, and they can also enable trying on clothes and putting on makeup prior to going into dressing rooms or approaching the cosmetics counter.
A more practical benefit of 5G technology as it relates to physical stores will be found at the point-of-sale. Payments industry analysts believe that 5G is the missing ingredient in the perfect recipe of true mobile payments, and this is something that merchant processing companies also believe will result in a digital payments revolution. That current lag experienced by shoppers who wish to pay with their smartphones at POS terminals should go away once 5G is implemented.
Mobile Shopping Trends
The use of digital wallets and other devices that enable contactless payments has been on the rise across Asia and Europe. In China, nearly 50% of retail purchase transactions are settled with digital wallets; in the U.S. only 23% as of July 2019. Another improvement that retailers can expect from 5G technology is to mobile equipment; brick-and-mortar stores that do not offer this option should start looking into ways of implementing it between now and the end of 2020.
The next major retail trend in the U.S. is expected to be a hybrid of mobile shopping and in-store pickups. A neighborhood pizzeria that offers takeout should strongly consider developing a native or progressive web app that enables mobile ordering and payments because this is what many consumers are showing a preference for: they want to browse menus, select toppings, and pay for their orders right from their smartphones, but they also want to be able to stop by the stores and physically retrieve their purchases.
