There is too much information out there across the Internet championing one mobile payment system or another. Articles filled to the brim with statistics and proselytizing the apocalyptic doom of the real world wallet. And while statistics and trends in programming and technology are definitely tilting towards increases in mobile payments, it is far from over for our leather bound cash and plastic holders. We try to make sense of it all, and determine which mobile payment method you should be using below.
To be clear, the term mobile payment is a pretty large umbrella. Falling under its purveyance are premium SMS, direct mobile billing, web based payments and most intriguing and the central topic of this post, contactless Near Field Communication (NFC), which has been adopted by almost all of the major virtual wallets. While it is an obvious trend that people are purchasing more on their phones through apps and mobile ready sites, using your phone at the point of sale in brick and mortar stores is another battleground entirely. Here is what we like about the contenders.
Google Wallet/Android Pay
Revamped in 2015 Google has decided to differentiate its virtual wallet from its mobile payment system. Android Pay is what you would use in a brick and mortar store with NFC technology. We like that it can be downloaded onto any android phone, does not need to be opened on your phone to use, and is compatible with many stores’ loyalty cards.
Apple Wallet/ Apple Pay
Formerly Passbook, now Apple has condensed everything into an app called Wallet, where you will find your plane and concert tickets, iTunes gift cards, or NFC mobile payment options. In what we now often take for granted, Apple Pay’s user experience is very friendly, however it is just starting to accept loyalty cards/programs (which are the real pain of real world wallets) and adding them into Wallet can be a bit clunky.
Samsung Pay
Samsung Pay is an exciting entrant in the virtual wallet world. It is similar in its functions as the aforementioned mobile payment options, however it stands out with its ability to use both NFC and magnetic stripe technology. This gives truth to its boastful claim that it works in more stores than any other mobile payment service. Although the security issues with magnetic stripe technology remain, this was a smart move for the Samsung programming and tech department, as merchants will not have to take on the financial burden of adopting NFC technology, but still allow users the option of paying with their phone. Right now, you need to have one of Samsung’s new, top tier phones (Galaxy S6*, Note 5) to use the technology, but look for more affordable Samsung phones to be equipped with this tech in the future.
CurrentC
This is the alternative to NFC technology that the Merchant Customer Exchange (MCX), a group formed by disparate retailers to develop a mobile payment system to sidestep credit card fees. This has caused quite a controversy as some super stores like Walmart, Target and Best Buy are choosing to only allow CurrentC as the stand alone mobile payment option. Interestingly, mobile payment advocates have rebelled against this option and flooded the CurrentC app with poor reviews.
It will take some time to see how all of this shapes up and which technology is adapted by both consumers and start-ups. As a small business, it is important to know your demographic before considering a switch. Millennial’s are largely the force driving the mobile payment charge. If your brick and mortar business caters to them, it may be worth upgrading the technology. Not surprisingly, those under 30 make up the largest chunk of mobile payment users at the point of sale.
Programming and technology will only continue to smooth out the blips and reinforce the security of mobile payments, with NFC style transactions taking the lead. According to Business.com, “Near field communication (NFC) is quickly emerging as the gold standard of the mobile payment industry… NFC-based sales could go from $60 billion (in 2012) to $110 billion (in 2017).”
It is clear that eventually mobile payments are going to become mainstream. This past summer, Starbucks CEO Howard Schultz exclaimed, “We have reached the milestone where mobile payments now represent 20% of all in-store transactions in our US [Starbucks] stores, more than double the figure from only 2 years ago, and we are now processing nearly 9M mobile transactions each week.” Whether this happens for your small business sooner or later depends, but if your main customers are under 40, it would be best to have the technology before your competitors do.
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