Mobile payments forging ahead of NFC technology
March 22, 2013

Mobile devices have made a big splash in the retail world, with companies devising different ways to utilize smartphones and tablets to conduct transactions. Businesses that implement Sage Mobile Payments, for example, leverage hardware accessories that attach to smartphones and allow them to accept credit card payments from consumers. Other firms have leveraged near field communication (NFC) technology and quick-response codes in combination with mobile wallets.

However, new research conducted by Strategy Analytics suggests that latter approach - contactless forms of payment - may not be connecting with the average shopper. A mere 1 percent of customers use their smartphones to conduct contactless payments, according to the research company's survey, which polled shoppers from the United States, the United Kingdom and China.

For consumers, smartphones and tablets are still pivotal to the buying experience - they use these devices for product research and to source discounts. However, paying with their own mobile devices is not consumers' preferred means of payment - they would still rather use credit and debit cards.

"A lot of the mobile industry's focus on mobile's place in the retail environment has been around contactless payments enabled by NFC technology," explains Nitesh Patel, senior analyst at Strategy Analytics. "The ramp up is extremely slow and even years from now we are expecting only a minority of consumers will use mobile payments."

In the near future, contactless payment solutions will remain niche. Citing the Strategy Analytics survey, Fierce Mobile IT notes that even through 2017, contactless payers will account for only 2.9 percent of mobile phone owners.

Embracing credit card processing
While new contactless technology occupies much of the buzz in the payments space, the fact of the matter is that it's still a relatively nascent way to process purchases. Meanwhile, recent research conducted by Visa has found that consumers are using credit cards more than ever, with the volume of transactions increasing by 11 percent over the past year.

It's pivotal that companies can accept debit card payments and credit card payments because they are still the preferred payment tools of customers. Solutions such as Sage Mobile Payments ensure that businesses can do just that by utilizing their own smartphones and tablets to process credit and debit card payments.

Nexus: G-WEBCD3