Merchant adoption will drive mobile payments into widespread use
June 18, 2013

Improving customer satisfaction is a top concern for many small- and medium-sized enterprises aimed at generating revenue. Accepting plastic through integrated payment systems is a way for SMEs to boost the customer experience, as consumers wish to use their preferred purchasing method at the point of sale. But SMEs should look to additional credit card processing solutions, such as mobile payments, to enhance their customers' shopping experience, as the merchant side of the transaction platform is set to drive the purchasing option into widespread use.

Benefits of a mobile POS
According to a new study by Business Insider Intelligence, consumers are on the verge of transitioning to carrying around a mobile wallet rather than coins and cash, and purchasing products with a mobile device will increase as a result.

The "BI Intelligence Mobile Payments Transaction Value Forecast" estimated it will not be consumer-based mobile payments that will explode but the in-store option, as more customers will use their digital wallets in person rather than online. In fact, the forecast projected merchant mobile payment adoption will be more extensive than the consumer side. The study found only 7.9 percent of consumers have utilized mobile payments, while the number of in-store transactions through a portable gadget quadrupled in 2012 from 2011.

The forecast projected the total value of global offline transactions from a mobile device will increase from $120 billion in 2012 to $1.5 trillion by 2017. The U.S. market may reach nearly  $244 billion by 2017. Last year, the U.S. value of mobile payments was $15 billion.

In a previous study, Diarmuid Mallon, lead of global mobile marketing programs at SAP, said the merchant side of mobile payments will drive the purchasing platform into consumer use, according to Progressive Grocer.

"We are seeing a maturing of the mobile payments market, as we move from a service that is driven by person-to-person payments to one that must tackle the challenges of the retail environment," Mallon said. 

SMEs that accept mobile credit card payments may see customers start to go wallet-free to take advantage of the purchasing option. In fact, the BI Intelligence study found the value of mobile payment growth will occur from merchants adopting the POS platform. Companies should start to invest in an electronic purchasing method for consumers to utilize in stores. While online payments, such as those carried out through the retailer's website, are essential to driving sales, SMEs should also consider the benefits of an in-store mobile platform to generate revenue at brick-and-mortar locations. 

Nexus: G-WEBCD3