Research shows SMB merchants recognize the value of mobile payment acceptance.
Since the beginning of the pandemic, consumers have been reluctant to handle cash or shared devices, like PIN pads. As a result, the adoption of touchless payment options is on the rise. So much so that the 2021 Visa Back to Business Study found that 85 percent of consumers expect payment options when they shop in person. Moreover, they are looking for specific ways to pay: 62 percent expect contactless options, 41 percent expect support for mobile payment apps, and 37 percent expect to use their mobile wallets.
Mobile payments before and after COVID-19.
Since behaviors changed to favor touchless payment options, it appears that the pandemic will mark a turning point in mobile payment adoption. While the number of mobile payments was growing in the U.S. before 2020, it was doing so rather slowly. eMarketer reports that in 2019, U.S. consumers using mobile wallets increased to 64 million, up from 58.7 million in 2018. However, the number of users rose to 92.3 million in 2020 with eMarketer predicting an increase to 125 million by 2025. That means many more merchants and shoppers will soon discover mobile payments’ advantages.
- They’re easier: There’s no need to find a payment card in a purse or wallet – just use the smartphone that just about everyone carries. Consumers can simply pay through an app, often with a single click with tokenized payment data. Or, they can open the mobile wallet on the phone, wave it or tap it near the card reader equipped with near-field communication (NFC) technology, and the payment is complete. Checkout experiences with mobile payments are simple and fast.
- They’re more secure: Mobile payments offer a high level of security against would-be cybercriminals. In fact, contactless mobile wallet payments use technology similar to EMV payments, making it nearly impossible for a fraudulent payment or a purchase with stolen payment data to be approved. Also, the tokenization and encryption technology used in smartphones (as well as the ability to lock them and require a fingerprint, pattern, or PIN to open them), makes paying by phone very secure – even more secure than using a plastic payment card with visible account numbers.
- They’re popular with tech-savvy consumers: Digital-native Gen Z consumers are a growing consumer demographic – forecasted to comprise a whopping 59 percent of U.S. consumers by 2026. This up-and-coming demographic of mobile shoppers are accustomed to making peer-to-peer payments. Mobile payments offer them the option to pay with their phones when they’re shopping in person as well.
More people trying mobile payments and discovering their convenience will encourage them to develop the habit of using a phone to pay. Furthermore, they’ll quickly come to expect this payment option to be available to them, putting pressure on retailers to offer them.
Many Tier 1 retailers had the technology in place to accept mobile payments before the pandemic. Now, smaller merchants are following suit to meet that demand – providing their businesses with new functionality and efficiency. For example, mobile payments make it easy to complete touchless transactions car-side when customers pick up online orders. Of course, they also make in-store payments more comfortable for both sales associates and customers – requiring just a “tap and go” with no cash handling or touching the POS system required.
The opportunity for DBAs, ISOs, and VARs.
Businesses did what they could in 2020 to stay open and continue to serve their customers. In 2021, they’re looking for ways to improve the new processes they put in place. For many, that includes upgrading their POS systems to accept mobile payments.
Visa’s research found that 44 percent of small businesses believe contactless and other types of mobile payments are important investments toward meeting their customers’ needs.
Are you prepared to capitalize on that opportunity? SMBs that weren’t prepared to learn about mobile payments before 2020 will be ready to talk now.
For more information on how to implement mobile payment acceptance for your customers, contact North American Bancard.