A rising number of consumers and businesses are turning to mobile payment processing solutions for their transactions, a trend which is forcing retailers to adapt quickly. Research from Forrester, reported by RetailDrive, suggests that the total volume of mobile payments in 2016 was about $112 billion - a figure which will grow at a compound annual rate of 20 percent until reaching $282 billion by 2021. Of the retailers surveyed by the research firm, 50 percent said they'd already put in place or begun to develop plans to implement near field communication-enabled POS devices at the end of last year, with another 22 percent saying they plan to in 2017.
"Merchants who simply attempt to convert mobile moments into mobile payments moments will fail to reach the minimally viable customer experience for lasting adoption and use," Brendan Miller, the report's primary author, told RetailDive. "Conversely, those merchants who seamlessly embed the payment in the mobile moment itself will win with mobile payment."
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This rate of change means that integrating mobile payment into retail operations will no longer be optional - it will become a obligatory part of your financial ecosystem. Consumers increasingly use their smartphones as the primary hub for their entire lives, and merchants need to be able to adapt to this new reality. That means preparing for the future of mobile payments - without breaking the bank.
What are the available mobile payment solutions?
Depending on the precise nature of your retail establishment, you might be better served by different solutions that address divergent needs and requirements. Which direction you choose to go will depend on your budget, the physical layout of your establishment and the volume of payments you're processing. Some of the solutions on the market include:
- NFC Mobile Payments: These devices allow "contactless" payment using NFC-enabled mobile phones and enable plug and play support for Apple Pay, Google Wallet and Samsung Pay without any additional development work at the POS.
- Mobile POS Extensions: Also known as mPOS, mobile POS extensions allow retailers to carry their POS application on a mobile device and integrate payments as necessary.
- Mobile Pin Pads: This technology allows you to bring the payment device directly to the consumer where htey can pay without having to find a fixed POS station.
When integrating a mobile payment solution, it's important to ask yourself some key questions: What's your primary goal for the project? Are you trying to cut down on lines, engage consumers in multiple locations or build a mobile loyalty program? Or are you trying to create a "unified commerce" ecosystem, building a customer experience characterized by freedom and a lack of channels that erodes the barriers between e-commerce and brick-and-mortar retail?
How to cost-effectively integrate mobile payments
First, assess the status of your current POS system. Enabling NFC payments is one of the easiest modifications to make - if you already have EMV hardware in place, you can likely integrate NFC functionality without any additional cost.
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While it might be tempting to employ cheaper devices with more limited functionality, remember that above almost all else, consumers value flexibility. According to the TSYS 2016 Consumer Payments Study, there's a strong correlation between the type of payment and the product being purchased. Debit cards tend to be associated with every-day consumption like gas, groceries and paying bills, while credit cards tend to be used more in high-value, travel or luxury purchases. Cash is still favored at fast food restaurants and cafes, as well as for interpersonal transactions.
Your mobile solutions need to be able to handle different types of payments with flexibility, granting new options to consumers without restricting old ones.
Datacap offers solutions which automatically handle the integration of mPOS devices into your existing POS systems. These mPOS devices employ built-in EMV certifications, which cut down on cost and deployment times. Alternatively, you might be in the situation of a major retail organization looking to enable full direct-to-POS functionality with customer data aggregation and more. In that case, Datacap can also assist you with solutions.