5 ways mobile credit card processing is impacting small business
Mobile credit card processing is big business, and it's only getting bigger. Large credit card companies like MasterCard and Visa have discovered the advantages that come with offering mobile payments and payment card processing companies are right behind them, introducing new technology that helps merchants take payments without swiping cards. These changes are slowly but surely altering consumer expectations at the checkout, both online and offline, creating entirely new advantages and challenges for small business owners.
Consumers are spending more money and moving through lines quicker.
More and more consumers are getting comfortable with making payments using their smart phones and tablets. According to Forrester Research Inc., transactions made on mobile devices are set to double by 2018, with projections of $293 billion in U.S. sales alone. The ease and convenience of electronic shopping, coupled with increasing trust among consumers that their transactions will remain secure, has resulted in a vast increase in spending and faster moving checkout lines.
Fast service not only makes customers happy – it also improves the bottom line. When merchants are able to serve more customers in the same amount of time, it improves the efficiency and profitability of the business, particularly during periods of the day when sales tend to spike. Take-out restaurants are a great example of how mobile payments can increase profits during peak hours.
Storeowners that sell merchandise can set up sales representatives with mobile POS systems, allowing them to wait on customers, answer questions and process payments on the sales floor.
Introducing mobile payment options is easier for small businesses.
In most cases, mobile payment systems are inexpensive and don’t require extensive IT resources to introduce. This bodes well for small businesses that have just a few locations, as opposed to larger companies with multiple stores. The time and expense required to integrate these systems will be much greater for large corporations with massive infrastructures, whereas smaller merchants can be more nimble and adapt to changing consumer expectations quickly at a minimal cost.
In addition, tracking inventory and consumer activity is easier than ever. Small businesses often struggle with getting fast, useful data that helps them manage inventory levels and keep up with the changing demands of shoppers. Mobile payment systems have automated features that track these processes and help merchants better understand consumer behavior. This data can also be used to improve marketing efforts, enabling storeowners to structure promotional programs and incentives around the current tastes of frequent buyers.
Merchants can grow their loyalty programs.
One of the key benefits of using mobile credit card processing is the seamless way customers can use and earn credit with merchant loyalty programs. Instead of having to wrestle with fobs, punch cards or tabs on key rings, people can now use their phones to track these benefits along with their purchases. The information is recorded by the app on the mobile device every time someone makes a purchase. When businesses offer this convenience, it’s easier for customers to see the benefits they’ve earned. Loyalty programs are great for proving value, prompting customers to shop more often.
Businesses can process payments from remote locations.
Before mobile payment technology went mainstream, merchants were mostly confined to accepting payments in their brick-and-mortar locations. Today, small businesses can process transactions anyplace that has an Internet connection, including farmers markets and trade shows. People typically spend less at events that require cash, but with the convenience of buying electronically, consumers are spending more freely.
The convergence of consumer and merchant technology may be a challenge.
Mobile payment processes, and the technology that accompanies it, is a very different experience than consumers are used to having at the checkout. In some cases, people will need to hold their phones up to a near field communications (NFC) reader in order to complete a transaction, an experience that will be confusing for some people. One of the greatest challenges to the widespread adoption of mobile payment transactions will be educating consumers about the technology as merchants work to integrate it within their existing systems. If consumers don’t easily understand how it works, they will be less likely to use the option, no matter how convenient it may ultimately be.
Another obvious challenge is the data security features inherent in these new systems. Customers will need assurance their personal data will be protected, regardless of how the transaction takes place.
Mobile payment processing is revolutionizing commerce, at home and abroad. The speed and convenience it offers to consumers encourages them to spend more per transaction and shop with greater frequency. It also gives merchants the added advantage of streamlined data processing and real-time information they can use to improve their marketing. The impacts on small business are numerous, and the sooner storeowners can figure out how to implement it in their existing systems, the sooner they will reap the benefits.