For those business that have not gone the way of mobile payments for their customers, they may want to take a look at how business is changing with such technology.
Simply put, mobile payments allow the consumer to pay for a product or service without needing cash, checks, or credit cards. The customer can pay for an array of items, including music, videos, transportation fares, magazines, books, tickets to events and more.
With the retail world moving more towards mobility, those businesses not getting on board the mobile train could end up losing customers as a result. As more customers turn to “digital wallets” to shop for and purchase goods, it is becoming more and more apparent that many business owners need to review their present payment systems.
According to a survey earlier this year from the National Retail Federation, approximately half of those retailers polled indicated they planned to utilize a mobile device for cash register purposes within a year to 18 months.
Meantime, global mobile payment transactions are predicted to total $171.5 billion in 2012, a 62% jump from $105.9 billion last year, and could hit $617 billion by 2016, according to research firm Gartner.
Despite such predictions, not all small business owners have jumped on the mobile bandwagon, with some noting that spending additional money on another piece of hardware may not be an option for them.
That being said, some companies in the mobile payment industry have been reaching out to small business owners to get rid of their costly point-of-sale (POS) equipment in exchange for simple loyalty programs and per-transaction fees. Some small businesses, meantime, have expressed interest in the mobile payment movement in order to lessen the fees they have to pay to both the banks and credit card companies for traditional credit card purchases.
Among the companies that have been adapting to change:
- Starbucks allows customers to make a coffee purchase by using its in-store optical scanners during the checkout process, reading a user’s smartphone screen to deduct funds from a Starbucks card;
- Square, which makes small credit card readers that plug into smartphones, received a $25 million investment from Starbucks. The infusion of cash means that customers can use a Pay with Square smartphone application to buy coffee. The Square process is another option to mobile payment systems like Google Wallet and the coming ISIS network, which center on smartphones equipped with NearField Communications chips to transfer data to an NFC terminal in a store to complete a transaction;
- Dunkin’ Donuts offers a mobile app for purchasing coffee and other items, using money kept on a Dunkin’ Donuts card tied to a customer’s smartphone. That smartphone runs the Dunkin’ App downloaded from the Google Play store or Apple’s App Store. Users sign off on the payment through the phone, then scan the smartphone screen over an optical laser reader at checkout;
- LevelUp uses QR codes to finalize mobile transactions and loyalty campaigns. LevelUp makes available to small businesses an innovative solution that takes payment via a personalized QR code and provides integrated customer acquisition and retention opportunities, along with peer-to-peer (P2P) mobile gifts. Consumers download a free app, tie it to their preferred credit or debit card and start purchasing. LevelUp is easily available for businesses, the only requirements being an account and a dedicated mobile device (smartphone or tablet).
With other mobile payment options out there, one of the biggest challenges for small businesses and consumers is keeping all the choices straight.
Given that there are already a variety of credit card options available to both consumers and small businesses, some users may not be inclined to use another payment alternative tied to a smartphone.
The bottom line for major mobile payment usage is that both the apps and steps needed in the process have to be easy to use, along with the service being secure.
If more small businesses see both of those factors occurring, the mobile payment world could soon really take off.
image credit: dailydeal
Dave Thomas, who writes on topics such as starting a home business and mobile payments, has more than 20 years of experience as a business writer.