A recent article in the Green Sheet discussed the growth of mobile payments.
Surprisingly, while it would be easy to assume that mobile payments are in fact growing, the rate of there growth is slow. Mobile payments, and the technology used to process credit cards from your smart phone is popping up more and more, as companies like Square try to change card processing, and other try to keep up.
There are problems with mobile payments, which have made it’s growth slow. One problem for example, is with the errors merchants can run into when trying to process on their smart phone. According to the Green Sheet article, 68% of consumers with smartphones or tablets have attempted to use the devices at the POS, yet 66% of that group reported being unable to complete the transaction.
The idea of mobile payments is still relatively new, and as it advances, this will more than likely become less of an issue.
The author of the Green Sheet article goes on to mention other key reasons, but he fails to see the biggest problem with mobile payments.
For a merchant, being able to accept credit cards on their smart phone is a great tool. However, relying on a company that only allows a merchant to do this, prevents the merchant from growing their business.
For example, when you use Square to process transactions, it’s easy and a great tool for when a merchant is at a trade show or another mobile event. It can even be used on a tablet and used as a POS system.
But what happens when you want to grow? What happens when you want an actual credit card terminal or you want to sell gift cards?
This is where companies that focus only in mobile payments stumble. Merchants need to be aware that mobile payments and being able to use your smart phone to accept them is a great tool, but building your business solely around mobile payments will hinder it in the end.
For a business to grow, you’ll eventually need to setup gift cards, accept checks, or even take out a cash advance loan for expansion. Mobile payment processing companies don’t always offer these things.
So are mobile payments moving credit card processing in the right direction? For the most part it is, but don’t put your entire business into the mobile payments basket. Be flexible and use it as a tool to succeed, but also recognize when you need a real terminal, and need other things besides a smart phone credit card reader to grow.