“Mobile” is certainly the latest buzzword when considering payment options for today’s small business. Mobile payment options are non-traditional payment alternatives that enable the customer and small business owner to utilize cell phones or mobile devices to conduct transactions. Mobile payment is fast and easy for the “plugged-in” consumer, and transactions occur instantly, benefiting the forward-thinking business owner. As technology increases in the hands of the consumer, accepting mobile payments will likely become a requirement for all successful small business. But accepting payment from cell phones offers as much convenience and value to the small business owner as it does to the consumer. Consider some of the ways small business stands to benefit from this technology.
Until now, small business owners have had to face the unavoidable expense of setting up an electronic point-of-sale system to accept credit card transactions. It’s long been a costly alternative to conducting a less desirable, cash-only business. But web-based credit card services are now available to anyone with an internet connection, and a variety of inexpensive card readers, and free apps, are available for iPhones, Androids and tablets. All of this effectively transforms the small business owner’s mobile device into a cash register, inventory management system and point-of-sale terminal, wrapped up in a single inexpensive, and simple to use, consumer device.
Beyond the increased flexibility in accepting credit card transactions, imagine the freedom and convenience of allowing your customer to pay with a simple wave of a cell phone. Near Field Communication, or NFC, is the technology that allows mobile devices to communicate using pay-wave terminals. The concept is simple. To complete transactions with pay-wave technology, the customer need only hold his or her mobile device over a pay-wave terminal. The debit is immediately deducted from their credit card account and transferred into the seller’s account. Payment for services is electronically conducted immediately; the small business owner need not wait several days for credit or debit card purchases to clear.
Pay-wave technology is already being embraced by several major U.S. banks, and the top three U.S. credit card companies have all implemented NFC payment options for their customers. Major American retailers are also fast embracing mobile technology. Starbucks set up a bar-code based, mobile payment system in their shops in January of 2011. By March, mobile technology had already been used in over three million transactions.
For small business, harnessing the power of a mobile payment option to distribute advertising, or tender coupons, discounts and club perks, may offer a significant economic advantage over traditional routes. Internet giant, Google, announced the launch of Google Wallet this month, extending the services of Google Checkout to mobile devices. With Google Wallet, the company intends to integrate its arsenal of coupon and discount delivery services into their new mobile option.
Experts are predicting that the rapid increase in NFC devices and capability, along with the increasing list of mobile payment options for both the consumer and small business owner, mean the business community at large will soon be compelled to embrace new mobile payment technology. Some financial experts predict that the 2012 Olympic Games in London will become the first worldwide showcase for NFC and other mobile payment options. With all signs pointing in the direction of mobile transactions, along with the increased convenience to the customer, and the cost benefits to small business, adopting one, or several, mobile alternatives today could make dollars and sense for years to come.