Online Payments: Money Goes Mobile

By Julie Knudson | Posted November 26, 2014

You've got Apple Pay and Google Wallet. You've got credit card readers attached to tablets. The mobile payment options consumers have available to them continues to grow, but between the hardware requirements and the need to support existing operational systems, how is a small business owner to know which mobile payment platforms to embrace? The right strategy needs to offer flexibility without breaking the bank.

Trends in Small Business Mobile Payments

First we had brick-and-mortar stores, then transactions moved online, and now Joe Pergola, vice president of sales and marketing at POS software and hardware provider AccuPOS, says location is even less important with the latest mobile payment options. "The museum gift shop eventually will have an event outside in the courtyard, and they want to bring some merchandise outside and sell it," he offers as an example.

Whether it's restaurants participating in food fairs or craft stores selling their wares at holiday bazaars, Pergola says small businesses are increasingly looking for "an extension of their point-of-sale system that's mobile but doesn't entirely isolate that data or isolate those funds into a different account." Some mobile POS terminals are scaled-down countertop units, while others are uber-portable tablets and cell phones.

Mobile payment options for small business

Also influencing the mobile payment landscape is the increasing use of near field communications (NFC), one of the technologies helping to make platforms such as ApplePay and others a reality.

"NFC enables consumers to securely send card details over the air to a special type of reader, which then securely conveys the details to the payment-processing network," says Thierry Denis, president of Ingenico North America, a payment and hardware solutions provider. Some SMBs are taking a wait and see approach to technologies such as NFC—and the payment options it's created—but others have taken notice of the hoopla. The fast-growing popularity of Apple Pay, for instance, has brought businesses into the mobile payment fold for the first time.

Get Ready for the Mobile Payment Evolution

If you're thinking about accepting mobile payments for your small business, you have several strategies to consider. "Merchants can accept mobile wallet payments at their fixed terminals by adding on equipment such as an NFC card reader," Denis says.

A mobile point-of-sale (mPOS) solution is another option. Rather than setting up a system for an mPOS solution that's separate from any existing payment platform, Denis says, "[T]hey can be an add-on, so all the data is integrated and you can maintain that 360-degree view of the customer."

These types of mobile solutions allow SMBs to accept multiple forms of payment—traditional payment cards and gift cards, as well as payments made through Apple-esque mobile wallets—no matter if the transaction takes place in-store or at some other location, and they're typically smartphone- or tablet-based.

Before jumping into any new equipment, Pergola says it's important to understand what you're trying to accomplish and how you can do it without completely disrupting your existing systems. Every transaction should funnel into the same accounting and customer management software.

"We advise that [small business owners] slow down, to a certain degree, and not start trying to change everything just so that they can accept Apple Pay," Pergola explains of businesses just getting into the mobile payment sphere. And unless there's a specific reason a business wants to process only certain types of mobile payments, he adds, "They should probably wait for a more multi-platform device that can accept all these things." If the price of new hardware is prohibitive, he suggests that SMBs contact their credit card processing company to see if it has any reduced-cost programs available.

Still Not Sure About Mobile Payments?

Pergola stresses that SMBs need to know their own businesses. Some companies may not reap the rewards they expect. "If you believe that you have a tech savvy clientele and that this will create some sort of business for you, by all means, try to stay on top of that technology," he says, adding that many companies probably don't need to worry about it right away.

Unless you know mobile payments are something your customers expect, it may be more prudent to shop around and carefully evaluate the costs. "If it looks cost prohibitive, and you can't justify the return on the investment, then you should probably wait." Small business operators can always decide later to implement new payment solutions, when the technology is less expensive and better distributed throughout the market.

The decision to accept new types of payments may not be an easy one, but Denis says his team is seeing broad support for Apple Pay and NFC. "For merchants who experience high frequency—think purchase types that customers make multiple times per week or month—we think Apple Pay is a no brainer."

Because Apple Pay is NFC-based, the underpinnings required to accept it will likely enable a small business to accept payment through the majority of other mobile wallet platforms, too. "But really there is no need to pick and choose what you want to support, especially if you are using an mPOS system," Denis says.

You can configure most systems to accept a multitude of payment types without difficulty. In addition, the right card reader will also allow you to accommodate customers using the new chip-and-PIN cards.

Julie Knudson is a freelance writer whose articles have appeared in technology magazines including BizTech, Processor, and For The Record. She has covered technology issues for publications in other industries, from foodservice to insurance, and she also writes a recurring column in Integrated Systems Contractor magazine.

Do you have a comment or question about this article or other small business topics in general? Speak out in the SmallBusinessComputing.com Forums. Join the discussion today!

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