Over the past six months, mobile payments skyrocketed from an industry conversation to mainstream news, fueled by myriad new entrants to the market. Historically, the majority of technological innovations were easily accessible to only mid- and large-sized businesses, but mobile payments level the playing field, providing businesses of all shapes and sizes with new payment acceptance solutions that capitalize on mobile commerce to attract new business, cultivate loyalty with existing customers and grow revenues.
For small businesses, the challenge today is selecting a mobile payment solution that solves for today’s needs, supports future growth, provides security and remains relevant in the future. Unfortunately, with so many players in the marketplace, mobile payment uncertainty is stalling the decision making process. Examining the most popular options to demystify mobile payments and help formulate a plan to obtain value from this exciting emerging technology.
NFC and Mobile Wallets
Companies like Google, PayPal, ISIS (a joint venture of AT&T, T-Mobile and Verizon), Sprint, Apple, Visa,LevelUp and hundreds of others are vying for business acceptance and consumer adoption of their mobile wallet and mobile payment products. Meanwhile, others including Square, Intuit, VeriFone and PayPal continue to attract small businesses with their convenience-based mobile payment acceptance solutions. Add in a deluge of additional noise from loyalty, gift and other mobile commerce specialists, and you’re left with a sea of confusion, especially for small business owners.
Leading providers such as Google, ISIS, Visa and Sprint are relying on promotion of NFC from the mobile network operators (smartphones and tablets) and merchants (countertop payment device) as well as consumer adoption of their individual ‘branded’ wallet. Much debate remains about the availability and implementation timeline of payment types, including NFC, and that will impact the adoption success for this group of mobile payment providers. As we wait and see what plays out with NFC, other companies are taking advantage of innovative technologies, such as QR codes, to expedite their entry into mobile payments and mobile commerce.
QR and Loyalty Programs
LevelUp is one company that uses QR codes to complete mobile transactions and loyalty campaigns. LevelUp offers small businesses an innovative solution that accepts payment through a personalized QR code and provides integrated customer acquisition and retention opportunities as well as peer-to-peer (P2P) mobile gifts. Consumers download a free app, connect it to their preferred credit or debit card and start buying. Businesses pay no interchange fees and drive new customer engagement through LevelUp’s traditional or co-marketingcampaigns. Businesses are charged based on campaign success. And, LevelUp is easily accessible for businesses, as the only requirements are an account and a dedicated mobile device (smartphone or tablet).
Mobile Payment Acceptance
Another growing space is mobile payment acceptance, which provides small businesses with a convenient solution to accept payments either off-premises or without a formal credit card terminal. Businesses use a card reader that attaches to a smartphone or tablet and is connected to their merchant account. These providers rely on an Internet connection to accept and process traditional magnetic stripe (mag stripe) credit and debit cards.
A vastly growing market was evidenced by Square’s recent partnership announcement with Starbucks. Over the past three years, options from Square, VeriFone, PayPal and Intuit offer an immediate solution for thenearly 15 million U.S. businesses that currently don’t accept credit cards, and a solution for businesses that need a secondary, ‘mobile’ payment gateway. Some would argue that these solutions are not truly mobile in terms of accepting payments from a customer’s mobile device, but regardless of the perspective, it’s a key growth area within payments and allows more small businesses to accept debit and credit transactions.
Which to Choose
Now that you’re familiar with all of the existing options, the next step is deciding which system works best for you and your customers. To get started, begin with outlining your specific needs and goals. This will streamline the choice by pinpointing which mobile payment option supports your business plan. Once the list is compiled, investigate each offering thoroughly, whether it is an all-in-one payment solution or an individual solution, such as a mobile wallet or mobile payment acceptance device. Check rates, read reviews, and visit competitor businesses to see what is gaining traction in your local area.
Payment technology is being developed to help disparate systems work together. Until unified systems are available, the best option small business owners have is to research, compare offerings to their business goals, and then research again. The last thing a business needs is to buy a quick snake oil sell and wind up implementing a mobile payment option that is non-existent in a year. That said, waiting too long on mobile payments might leave your business behind. Get ahead of the competition and begin realizing the value of mobile to reduce costs, attract new business and retain existing customers. Use mobile today to grow your business and drive incremental revenues -– just make sure you do your research first.