I have a favorite local coffee shop. They serve really tasty lattes, and every now and then they have this vegan brownie that tastes, well, good enough to be full of all the indulgences it isn’t!
One of my favorite things about this coffee shop is how quickly the line moves. Despite being in a pretty busy area, they get customers in and out at a pretty fast rate. Part of that is due to their speedy customer service, but a big part of that is due to their technology.
From what I can tell, they run their business from a tablet. It sits on the counter where the barista takes orders, and he or she flips it around when it’s time to pay. And when it’s my turn, I wave my watch in front of the tablet, and I’m good to go (after choosing how much to tip on the tablet, of course – I’m not a monster).
As I was doing some research this morning about the adoption of mobile payment technology among small business owners, I started thinking. What is it that allows me to pay businesses like this coffee shop by simply waving my phone or my watch in front of a register, point of sale (POS) system, or other device?
You’re probably thinking, “It’s obviously the mobile payment technology in your smartwatch or phone.” And you’re mostly right.
But it’s also about trust.
Did you know only 62% of small business owners trust cloud-based technologies. But for consumers in the U.S., mobile wallets are expected to surpass credit and debit card usage by 2020.
So, while consumers (like me) clearly feel secure enough with mobile payment technology to trust their smartphones and wearable devices with their banking information, businesses haven’t been quite as quick to adapt to the mobile payment trend.
Mobile Payments Surge in 2018
It’s expected that by 2020, in-store mobile payments will reach a whopping $503 billion spend. That means that over time, consumers will become more and more comfortable with and, more importantly, reliant upon mobile payment technology rather than cash and credit cards to purchase your products and services.
Mobile payment technology doesn’t just benefit consumers. For small businesses, it can mean faster processes (like that checkout line at my local coffee shop), better customer experiences, and even reduced costs of doing business.
If you want to keep up with the trend and avoid missing out on revenue from these mobile technology adaptors, your business needs to implement mobile payment technologies before you’re left in the digital dust.
The Difference between Mobile Payment Technology and Digital Wallets
Before we get into the “how” of implementing mobile payment technology, let’s get the terminology straight. Marketers use the term “mobile payments” to refer to a few different uses of the technology.
To some, it can mean a “digital wallet.” A digital wallet is an embedded or aftermarket phone application that lives on a consumer’s mobile device. Consumers have to open or initiate the app to pay merchants who have the appropriate technology to accept this form of mobile payment.
To others, it can refer to the technology merchants and small businesses use to accept payment from consumers, whether they’re paying via mobile or not. Business owners use their mobile devices, typically smartphones or tablets, to accept payment from their customers. They use their devices to process traditional forms of payment like credit and debit cards, and in some cases even checks.
Third, rarely, it can refer to peer-to-peer payment transfers via apps like PayPal, Zelle or Venmo.
Implementing Mobile Payment Technology
It’s time to choose a small business mobile payment processor. Here are some of the major players in mobile payments right now:
The mobile payment processing solution you choose will depend largely upon budget as well as the hardware you’re most comfortable using. Many popular mobile payment solutions come accompanied by stand-alone machines or even plug-in card swiping hardware that attaches to your mobile device. Others offer reader-less mobile payment processing (like our own tool, Thryv). Or, there are still physical POS systems out there that can process proximity mobile payments from your customers’ digital wallets.
Again, it’s all about considering how and when you choose to accept payments, and what’s best for your customers.