Mobile payments are getting big, and the predictions are even bigger.
It’s been reported that over 70% of the world’s population now owns a mobile phone. That’s over 5 billion mobile subscribers, and in places like the United States, it’s 9 in 10 people.
Mobile payments are now taking off. The abililty to accept mobile payments came to fruition 10 years ago, but remained stagnant until 2010, when it reached its tipping point with the massive adoption of
smartphones. According to a recent Gartner report, the number of mobile payment users will hit 141.1 million this year, a 38.2% increase from 2010. The research firm reported the 2011 global mobile payment volume at $86.1 billion, up 75.9% from the 2010 volume of $48.9 billion. And if that’s not enough, a recent study by Juniper researchsays the total value of mobile payments will triple by 2015, to an estimated $650 billion.
Given these statistics it’s reasonable to assume that as more businesses start to accept mobile payments, customers will begin to expect it more and more.
What are Mobile Payments?
Before we go too far, let’s quickly define what we mean by mobile payments. “Mobile payment” is an all-encompassing term covering any form of payment for a good or service or any transfer of money between two parties, executed through a mobile phone.
For most of this article we will focus on one portion of the mobile payments space; small business credit card processing on a mobile phone.
Should Small Businesses Care About Mobile Payments?
Small businesses need to place their bets carefully when embracing new technologies. Not all hot trends are smart investments for a small business. Let’s analyze mobile payments from the perspective of a small business:
Are your customers ready? Yes, your customers are ready for a portion of mobile payments. With the proliferation of mobile banking apps, consumers are now comfortable conducting financial transactions on a mobile device.
Customer acceptance has not yet been proven, however, for NFC (near field communications) technology. With NFC, the actual payment is made through a payment mechanism embedded in the customer’s mobile phone rather than with their credit card. Since NFC will require a change in customer behavior, it’s best for small businesses to sit back and monitor how NFC evolves over the next couple of years before making any investments.
Is your small business ready? In a recent AT&T small business survey, 72% reported using mobile apps in their business. So yes, if you have a mobile smartphone, your business is ready to accept mobile payments on the go.
The other lovely thing about mobile apps is that they are easy. We all know how to find them, how to download them, and most have a refreshingly easy interface. No additional hardware, complicated solutions, or technical expertise is usually required. It’s the easiest payment processing has ever been for a small business.
So both parties are ready, but what’s in it for you?
How Small Businesses Will Benefit From Accepting Credit Cards on Mobile Devices.
Small businesses do a lot of their work remotely. Conducting work away from the office is on the rise. According to the previously mentioned AT&T survey, ownership of wireless devices for the purpose of remote work is on the rise. 40% of small businesses report all their employees use wireless devices or wireless technologies to work away from the office; a 66% jump over the past two years. So yes, small businesses are accustomed to, if not fully reliant on, doing business on the go.
Mobile credit card acceptance means getting paid faster. In these economic times, cash flow is more critical than ever. However, it continues to plague small businesses. In a recent Wells Fargo survey of small bussinesses, only 38% reported currently having favorable cash flow. In theDiscover Small Business Watch survey, 46% of small businesses reported experiencing a cash flow issue in the last 90 days. When a small business decides to accept mobile payments, they are able to collect at the time of product or service delivery. Small business owners no longer have to wait until they get back to the office to mail an invoice or wait for a check.
Accepting credit cards from anywhere means more sales. With mobile payment acceptance as an option, you no longer have to turn away customers who don’t have cash or a check. It’s been reported that 80% of consumers have credit cards, yet according to a recent NFIB small business survey, 51% of small businesses don’t accept credit cards. What a huge advantage for small businesses over their competitors that cannot accept mobile payments on the go.
Payment convenience delights customers. Eliminating all friction in the payments process and the ability to say “yes” to any way a customer wants to pay you will help you keep your customers happy. Mobile credit card acceptance makes payments so incredibly simple and convenient that your customers will be delighted to do more business with you.
Mobile credit card acceptance decreases the time spent on billing. When payment is collected at the time of service, that translates into less time spent sending bills and tracking down payments. Small business owners can spend less time conducting administrative billing tasks and more time growing their businesses.
Are Many Small Businesses Embracing Mobile Technology?
While the above reasoning sounds quite convincing, many small businesses don’t like to be the first to dip their toes into the water. Rest assured that lots of small businesses are making active investments in mobile technologies now and increasing those investments over the next year.
In a recent survey by CompTIA, seven out of ten small businesses surveyed said they would spend more on tech in an effort to improve customer interactions, mobility options and operational efficiencies. Among small businesses (10-99 employees), 25% currently use mobile solutions and 43% expect to start in the next 12 months. Even the smallest of businesses surveyed (one to nine employees) expect to significantly increase usage of mobile technology, with current usage at 12% and planned usage at 22%.
For small businesses, mobile payment acceptance represents a great opportunity to increase cash flow while being more efficient and providing better customer service. Small businesses should research their options and start accepting mobile payments today.