Are mobile payments right for you? A Q&A discussion
Between cash, check, cards and mobile payments, today's consumers have more payment options than ever before. As consumer payment preferences evolve, business owners will need to evaluate all of these new technologies. Mobile payments have many benefits, as they can help your business grow through increased customer engagement, improved flexibility and provide a better customer experience. But are they right for your business?
As part of National Small Business Week, we spoke with Matt Ozvat, vice president of developer integrations at Vantiv, to discuss mobile payments adoption and best practices small businesses should follow.
Q: What’s the biggest trend you’re seeing with small business merchants as it pertains to mobile payments adoption?
When I think about mobile payments trends for small-to-medium sized merchants, the first thing I look at is the audience. Merchants need to be asking: Who is the audience I am serving? What payment characteristics does my audience exhibit? Does my audience fit the profile of using a mobile phone? Would my audience benefit from using mobile wallets? Once merchants understand the answers, they are able to differentiate the types of payment experiences their target audience prefers. An example I like to use is when you’re at a swimming pool and you want to get a drink or lunch at a swim up bar. Do you take your phone and risk it getting wet or water damaged? Or do you simply bring a credit card and refrain from using your mobile device? Or do you just charge this to your hotel room if that is possible? This example highlights how individual use cases and audience preferences will ultimately determine whether merchants will accept mobile wallets.
Q: For mobile payments adoption, are there best practices that small businesses should follow?
The most important aspect is the need to understand your audience well. Successful small businesses usually offer a very specific service to a select audience. If this service is of high quality and caters to a particular kind of audience, then it will be the characteristics of your customers that will determine whether you have mobile payments acceptance. Is your audience demographic young, tech-savvy and hyper-connected? Then maybe mobile payments acceptance is right for your business. Alternatively, if you’re catering to an audience that doesn’t exhibit mobile-centric characteristics, then it probably doesn’t make sense to accept mobile payments. In the long run, it’s all about the consumer — and what your audience prefers, or will become, likely to use.
Q: Are there any particular trends you’re seeing for mobile point of sale or mPOS?
The discussion around adopting mPOS is either a real estate issue or the next step in moving away from older, clunky systems. The conversation revolves around small businesses wanting to maximize real estate while keeping costs low, both shrinking their POS footprint and enabling a greater consumer experience. As expected, a lot of newer solutions are mobile or tablet driven. As for those merchants who haven’t adopted mPOS, the biggest reason is often because these small businesses don’t have any financial reason right now to do so. On the other hand, I also see businesses that have been hit by security threats which have forced them to upgrade to more robust systems with better security.
Q: What would you say to small businesses looking at implementing mPOS because they can be cheaper and faster to market?
Consumer devices like tablets can be a faster way to shrink your POS footprint and alleviate costs associated with more robust systems but merchants must also be careful and proceed with caution. Why? Because consumer devices for tablet-based POS systems aren’t designed with POS in mind — they are built first and foremost for consumers to use at home. What this means for small businesses is that as devices change and evolve — for example, new hardware interfaces or device ports — you may be updating your mobile tablet every couple years. So, if your payments system was always destined to evolve, the cheaper costs begin to add up and could potentially cost you more in the long run than if you implemented a bigger and more robust POS system and payments infrastructure. It all comes down to balance and the ability to look ahead and plan (to the best of your ability) your future payments needs.
Q: Is there anything else that small businesses should keep in mind as they’re looking to upgrade their payments infrastructure?
First and foremost, small businesses need to make sure they have a POS system in place that fits their needs, and the needs of their consumers. It has nothing to do with payments. This decision is a large piece of the infrastructure puzzle that is very specific to the customer experience. Once you are able to understand the needs of your consumers, you can work with POS developers to find a payments system that enables you to offer the greatest consumer experience.
Get more information on mobile payments, from Vantiv.