Mobile payment users are set to soar in the coming years and this is the chief reason competitive businesses need to get on board.
While many large retailers, like Starbucks, have embraced the innovation, individual business owners have been slower to adopt, possibly due to the lack of knowledge they have on the advantages and opportunities mobile payments can provide.
A recent global report by IEEE, the Institute of Electrical and Electronics Engineers, found that 70% of respondents believed that by 2030 mobile payments will overtake the use of cash and credit cards. Mobile payment apps that are already integrated into smartphones such as Apple Pay, Android Pay and Samsung Pay will certainly spur use.
Almost 70% of new users who make contactless payments in stores are Apple Pay and Samsung Pay customers reports Juniper Research. Additionally, millennials, the demographic with the largest spending power, show a strong inclination toward mobile payments with eMarketer forecasting that 3% of 25 to 34-year-olds will have embraced the technology by 2017. To meet this demand, vendors should familiarize themselves with mobile payment technology sooner rather than later.
Another meaningful advantage that businesses can gain from adopting mobile payments is enhanced customer engagement and loyalty. This year, 89% of companies believe customer experience will be their primary basis for competition according to Gartner. By including mobile payment features within branded apps, businesses can more easily encourage people to purchase using their mobile phone, eliminating the need for physical rewards cards. Fast food giants like Burger King have already combined mobile payments and app rewards programs, making it easy for customers to redeem coupons and pay all through their phone.
MasterCard and mobile commerce technology provider P97 are another example of how mobile payments can enhance the customer experience by partnering to enable fuel companies to develop mobile apps for consumers. With these apps, drivers can search for the nearest or preferred gas station, make fast and simple mobile payments at the pump, and receive personalized offers for in-store purchases.
This idea has already been implemented by Cepsa Pay app, designed in collaboration with UK-based mobile payment technology provider PayMet, in Spain. These are great applications of mobile payment technology since purchasing gas is a frequent necessity that consumers simply want to buy and then leave without having to deal with credit cards and cash. Vendors can provide a more efficient and integrated checkout experience for their customers with mobile payment technology and the businesses that take advantage of this early on will benefit the most. The key for mobile payment adoption lies in how well the transaction experience is integrated into the overall shopping experience. Mobile payments change the shopping experience for the better and leads to more satisfied customers for the business.
To encourage small businesses to adopt mobile payments technology, some companies are offering additional benefits for entrepreneurs who use their services. For example, Square offers Square Capital, which provides business financing to qualifying Square merchants so they can grow their businesses. The initiative seems to be working for participants, as 85% of them say it is extremely likely they would recommend Square Capital. Ultimately, mobile payment technology needs vendors to embrace the concept for it to be a success and providers of the service are constantly working on ways to make adoption more seamless.
The success of mobile payment providers and vendors are ultimately intertwined, as both need to work together. While small businesses may not feel the urgent need to adopt mobile payments at the moment, they will be losing out in the near future as consumers increasingly look to use their mobile devices to pay for goods and services. To stay competitive and relevant, businesses of all sectors and sizes need to explore the possibilities of mobile payments.
Sergio Chalbaud is CEO of Fintonic.