Preparing for the New World of Payments

Jim Fink |

June 11, 2013

Preparing for the New World of Payments

Over the past 20 years U.S. merchants shifted away from checks and started accepting credit cards. Most merchants still rely on electronic cash registers (ECRs) or desktop computers as their point-of-sale (POS) terminal, but mobile technologies continue to evolve and gain traction. We are already witnessing the impact of mobile technologies with mobile payment and commerce applications, tablet based POS, mobilePOS and self-checkout, creating challenges and opportunities for business owners.

Mobile payment applications - often referred to as a mobile or digital wallet - allow consumers to make payments for products or services from their smartphone, without a physical card. Typically the digital wallet is connected to an existing credit card or bank account, but instead of swiping a physical card the consumer simply taps (near field communication) or scans (QR codes) their phone to make payment. Leading analyst firms including Forrester, ABI and Juniper predict that mobile payments will grow rapidly between 2012 and 2017, according to TechCrunch. As adoption of mobile technologies grows, consumer expectation around mobile payment acceptance at the merchant’s POS will rise as well. 

Additionally, merchants are using new types of checkout, or POS, technologies. In fact, tablet computers and smartphones now have the capability of replacing traditional cash registers for a wide range of merchants who favor the compact size and versatility along with integrated POS solutions that offer enhanced business management tools for a fraction of the cost of legacy POS systems. A new cash register costs about $2,500 more than a POS-equipped iPad, according to DailyFinance.

Self-checkout systems are also gaining popularity among larger retailers. Big box retailers like Wal-Mart and JC Penney have added self-checkout technologies to their suite of options for customers, offering the ability to buy most items without any employee assistance. Although self-checkout systems continue to experience rapid growth, they remain cost prohibitive for the vast majority of small and mid-sized businesses.

It's important that merchants proactively prepare for the mobile payment revolution. Merchants attract and retain more customers when they have payment technologies that accept credit and debit and the same will hold true as mobile payments become a standard form of payment, especially as loyalty, discounts and offers are integrated into these unified solutions.

For merchants that don’t have a POS, take a look at the new tablet based technologies – they’re affordable, convenient and the integrated management business will help you to more effectively run your business and deliver an improved customer experience. And, regardless of whether or not you have a POS, it’s important to research new payment acceptance technologies that offer you the flexibility, scalability and security to leverage new mobile payment and commerce technologies to grow your business.

Mobile presents an opportunity and not a threat. As always, merchants must determine their acceptable balance between old and new and remain focused on growing their respective business.