2 Myths About a Mobile Payment Solution
As consumers continue to reshape shopping and the landscape of commerce, it's difficult to determine where your payments-related thinking and investments should be focused. One payment form regularly up for debate includes the mobile payment solution. It's hard to know what's what in the world of mobile payments, but there are some myths that can be busted about the role of the mobile payment solution. Here's a look at two myths.
Myth #1: So many consumers still use cash for everyday purchases that it’s not worth investing in a mobile payment solution.
False. Cash as a payment solution is shrinking. Today’s consumers carry debit cards, credit cards and mobile wallets and less cash than ever before. According to British news publication The Week, in May 2015 “card and automated payments overtook physical money as the payment of choice for the first time.” That same article reported that from January 2015 to May 2015, “cash was used to settle only 48 per cent of all transactions.”
The Week also estimates that “by 2024 we’ll only be using cash twice every three days, according to Payments UK.” In September 2015, The Week made “fresh predictions that Britons may soon cease using cash to buy goods and services, as contactless payments surge and a new higher limit on ‘tap and go’ spending looks set to further the trend.” Indeed, the increase in popularity of mobile payments has directly contributed to the decline of the use of cash for everyday purchases. The Week reported that research from Lloyds indicates “a quarter of people believe they will ‘no longer need cash in five years.’” If consumers will no longer be using cash, then it’s important that you stay ahead of the coming payments trends so that you have the technology in place to continue to accept the payment formats that consumers demand.
Myth #2: Accepting checks is more important than having a mobile payment solution.
False. Even checks as a form of payment are shrinking at a surprising rate. In fact, some businesses have made the decision to stop accepting checks due to fraud concerns. And certainly, check payments have drastically decreased over the past several years. Motherboard writer Kaleigh Rogers reports that, in 2003, 46% of non-cash payments were checks. Fast forward nearly a decade and find the US Federal Reserve indicating that in 2012, just 15% of all non-cash payments in the US were made via check. Depending on your business type, having the technology and security in place to accept check payments may not be worth the small fraction of customers who still prefer to pay by check in 2016.
Mobile Payment Solutions—Worth the Investment
As you can see from the above, the traditional payment types of cash and check are, indeed, giving way to other forms of payment. Business Insider has reported that “the old paper-based tools for making and accepting payments are being swept away by the rise of eCommerce, mobile commerce, smartphone apps, and mobile payment registers.” Of course, it’s important that your business is equipped to accept magnetic stripe and EMV chip debit and credit cards.
But, it’s also important for your future growth that you keep an eye on the latest payment trends, including mobile payments. A BI Intelligence study directly linked the decline of cash and check payments with the rising popularity of people making payments with their phones in stores. Allowing customers to pay using a smartphone or smart device in your locations will expand your customer base, make your payment systems more secure and keep your checkout queues running smoothly.