Time for a pop quiz, folks. Here we go: What do the following things have in common?
- Puppy dog kisses
- A chewy chocolate chip cookie
- Your favorite celeb at the VIP meet and greet
- Mobile payments
If you said, “They’re all things I’d love to get up close and personal with,” you get an A+! If not, it was probably that last one – mobile payments – that threw you off. That’s because the world of mobile payments is evolving, most notably with the recent introduction of proximity mobile payments.
Up Close and Personal with Proximity Payments
What are proximity mobile payments? Proximity mobile payments, sometimes called Near Field Communication (NFC) mobile payments, are when you use a mobile phone to pay for something at a physical point-of-sale (POS) terminal.
But instead of typing anything into the phone, your payment information (typically credit or debit card data) is stored inside the phone via a special, secure chip.
To pay, you hover your mobile device near a POS terminal without touching anything.
The Proximity Mobile Payment Movement
Let’s give credit where credit is due. Who started the proximity mobile payment movement, and when? 2015 was the first full year of Apple Pay activity in the U.S. 2015 also marked the launch of Samsung Pay. Google’s Android Pay relaunched that year, with all three services thriving by 2016.
According to eMarketer, it’s estimated proximity mobile payments will total $49.29 billion in 2017. And by the year 2021, U.S. consumers will use their mobile phones to pay for $189.97 billion worth of products and services at a point of sale (POS) terminal. That’s about $2,646 annually per mobile user in the U.S.
When Proximity Mobile Payments Work Best
As a local business, keeping up with the trends in payment processing will do a couple things for you. First, it’ll help you keep up with the bigger corporations that are already moving in that direction. And second, it’ll help you amp up customer service in a big way, making it easier than ever for customers to do business with you, and more importantly, for you to get paid fast.
Though consumers are becoming more and more comfortable with online and mobile purchases, there’s still a level of uncertainty when it comes to their level of trust with mobile payment options on the whole. Most people who do opt into mobile pay at some point or another still lean on traditional payment methods for bigger ticket items.
That means proximity mobile payments have a sweet spot in serving customers who are purchasing low- to medium-priced products and services. Think: Coffee, local and quick service restaurants, groceries and other low-value, high-frequency purchases. Check out the predicted 6-year growth trend below, organized by product size.
Setting Up Your Business for Proximity Mobile Payment Success
If low- and medium-priced businesses are poised to benefit from proximity mobile payments, where do you fit in? Depending on the type of business you run, the possibilities are endless. We mentioned coffee shops and grocery stores, but local business owners can get in on the game too.
Some creative local business use cases:
- Physical trainers and other fitness professionals – No more fussing with wallets and purses after a tough workout.
- Spas and salons, as well as massage therapists – Make getting in and out faster, so you can move on to the next client.
- Pet services providers, such as groomers and pet boutiques – Fido will no longer get fed up waiting to book it after his appointment!
- Florists – Imagine processing Valentine’s Day orders in as little as a few seconds!
- Laundry service providers and dry cleaners – Set up a quick-pay pick-up station, so customers can grab and go.
The possibilities are endless.
Making it a Reality
What good is knowing all about the latest and greatest in mobile payment processing if you can’t make it happen for your business? The technology is still developing, and various service providers offer differing levels of mobile payment functionality. So do your research, and choose the tool you feel is most functional for your business.
Here are some of the major players in mobile payments right now:
As I mentioned, many of these providers offer varying payment processing technologies – both older and newer. So don’t be surprised if you have to choose between anything from the more popular mobile swiping card reading technology, to a reader-less mobile payment processing software for your phone (like our own tool, Thryv), or a physical POS system that can process proximity payments. Again, it’s all about considering how and when you choose to accept payments, and what’s best for your customers.