Accepting NFC mobile payments: 5 essential facts for SMBs
What smart merchants need to know about the state of accepting mobile payments in 2018
The smartphone is the ultimate disrupter.
Like all disruptors, the smartphone left a trail of obsolescence in its wake. Just ask the vanquished: the former makers of pocket digital cameras and MP3 players, or the former owners of shuttered brick-and-mortar record stores and newspapers.
One consumer item that has thus far withstood technology’s assault is the plastic credit card. Make no mistake, the credit card isn’t going away anytime soon. “Paying with plastic” is an act woven into the very fabric of not just our commerce, but our culture.
That said, today’s sophisticated and on-the-go consumer demands freedom of choice. That choice is increasingly to pay at the point-of-sale via credit cards stored on their smartphones. Retail merchants face choices as well. Given customer sentiment on mobile payments, the only real choice is, do you want to be ahead of the curve in satisfying your customers? Or are you willing to take a wait-and-see approach?
For those more comfortable taking the lead in providing customer satisfaction, here are five essential facts every smart merchant needs to know about the state of accepting mobile payments in 2018.
FACT: Accepting mobile payments is easy and convenient
One of the concerns with the introduction of EMV chip cards was that they added a new step to the checkout process. The process of “dipping”—and waiting—was always at least a little awkward. Regardless of how long it actually takes, consumers feel like dipping takes longer.
Contactless mobile payments skip the dip. For smaller transactions, contactless payments can skip the swipe, sign, and PIN as well. Some studies have demonstrated contactless payments taking less than half the time of comparable chip card transactions. You don’t need survey data to know that consumers hate to wait, even for seconds. Less time per transaction means happier customers.
Pop quiz: What is the one object that the vast majority of your customers have with them at virtually all times? If your answer is a purse or wallet, you just may have been sleeping for a decade. The answer, of course, is the smartphone. What could be easier than paying with the item that virtually everyone already has ready and waiting?
FACT: Mobile payment technology is stable, safe, and secure
As a merchant you obviously want and need to get paid. You also want to give your customers the peace of mind that paying you is safe and secure. You’re not an expert in credit card security, but you need to know that whatever technology is behind your payment system is lock-down. You need a payments partner that understands the ins-and-outs. You need a partner who understands mobile payments, and who has your back.
Whether they are called contactless payments, proximity payments, or NFC payments, the technology behind them is well-established. Near-field communication (NFC) is a technology that has been around for over two decades and a staple in smartphone technology since 2010. NFC is a short-range (“near field”) wireless technology that establishes a secure connection between two devices when and only when they are placed in close proximity to one another, less than two inches. Virtually every major market smartphone in use today has NFC technology built in.
Mobile wallets represent another critical part of the payments landscape. Google Wallet, Apple Pay, Android Pay, and Samsung Pay are household names, as are some of the ubiquitous mobile payment apps from companies like Target and Starbucks. Mobile wallets are made more secure by tokenization and point-to-point encryption. You don’t need to become a security expert to make an informed decision about your point-of-sale system. What you do need to know is that the technology for your business is the gold standard in protecting the private data of you and your customer.
NFC mobile payment technology represents the deployment of the most widely trusted and established security technology available at the consumer level today. The additional security of smartphones—from password protection to biometrics like thumbprints and face recognition—offers another layer of confidence that your payment system is safe and secure.
FACT: Paying by smartphone is the new consumer normal
The explosive growth in mobile technologies drives new consumer expectations, which are higher than ever. Whether you call it the “Amazon effect” or something else, what smart merchants are learning is that whatever any given consumer considers the “best” level of price and service, that’s what they expect from every merchant. If it doesn’t seem fair that your business has to compete with the likes of Amazon or Wal-Mart, you’re right. It isn’t fair. It’s business.
The 2016 PYMNTS.com SMB Technology Adoption Index shed light on what drives merchant adoption of in-store mobile payment solutions, and the driver is clear. “Customer request” was cited as the top reason by 31.3% of merchants. Convenience (21.9%), keeping up to date with technology (9.4%), and the ability to lower costs (6.3%) were the next most cited reasons. If you are reading this, it’s a strong likelihood that your quest to learn more was spurred by a customer asking when they could pay using their phone.
Futurists, cartoonists, and movie makers have long offered many versions of what commerce might look like a century from now. Today’s reality is in many ways beyond what even the most progressive thinkers imagined. Consumers across the globe have demonstrated not only their comfort with mobile payments, but their insistence on having every available option at checkout. Paying by smartphone is, simply, the new consumer normal.
FACT: Accepting mobile payments deepens customer engagement
A customer with a smartphone in your store represents a burning case of means and motive. You need to clear the decks of anything in their way of purchase. That’s what they mean by “frictionless” commerce, an analogy that comes to life when we talk about contactless payments.
You and your customers are on the same side of the table when it comes to payments: you both want it to be fast, easy, safe, and convenient. Beyond the clear benefits of increased ease of use and enhanced security, accepting mobile in-store payments helps build and maintain a trusted link between your business and your customers.
While it may come as a surprise, your payments vendor can help your business open doors to deepen customer engagement beyond the point-of-sale terminal. Take customer loyalty programs. Customers love loyalty programs because of the discounts and other perks. Merchants love anything that breeds loyalty and repeat business. Branded apps and other means to connect with your customers digitally provide all this and more.
FACT: The future is commerce-on-the-go, and the future is now
Commerce-on-the-go is the new reality. The smartphone is an ambassador of convenience and universal translator in a world of mobile commerce. It’s time for retailers to seize the moment and create consistently amazing experiences that delight customers.
Consumers hate to wait, and they hate lines. They value speed and personalization. Accepting mobile payments addresses key customer pain points and opens doors to deeper levels of engagement. The ability to pay by smartphone makes customers happy. Happier customers are more loyal customers. Happier customers fuel the success of your business.
Accepting mobile payments has quickly emerged as a cornerstone capability in the future of retail. Is your business ready?