NCR Silver Quantum in action at Atlanta's Ponko Chicken.
by Meg C. Hall
While flying cars and robot housekeepers remain a dream, consumers do have one up on George Jetson when it comes to paying for goods and services — the mobile wallet.
But what is it, and why does it matter to small business owners?
“Simply speaking, a mobile wallet is a way to carry your credit card or other payment options via your mobile device,” explained Nicole Leinbach Reyhle, founder of Retail Minded and author of “Retail 101: The Guide to Managing and Marketing Your Retail Business.”
Merchants understand the importance of making transactions as easy and painless for customers as possible, and as the digital-wallet trend grows, so will consumer demand for this payment method.
According to a 2017 Accenture survey, nearly half (46 percent) of U.S. consumers use a digital wallet today, and that number is expected to reach 64 percent by 2020. What’s more, nearly a quarter (23 percent) of consumers would willingly give up their mobile banking app for a digital wallet that managed all their payment information in one place.
“Business owners need to understand that while their preference may not be to pay via mobile wallet, for a growing number of consumers it is. Unless they want to risk losing customers, it’s important to welcome this growing trend into their payment strategy,” said Reyhle.
On the forefront of this trend is Gen Z, the first generation of true digital natives. Accenture projects this cohort will make up 40 percent of all U.S. consumers by 2020, and if businesses want to reach them, they need a mobile-first strategy. Survey respondents in this age group said they would give up friends or money in order to keep their mobile phones.
“The younger the consumer, the more likely the consumer is to use mobile wallet. That said, even mature consumers welcome commerce changes into their daily habits,” Reyhle explained.
As a merchant, you want to make the payment process as easy (and painless) for your customers as possible, so you give them options: cash, check, credit or debit card — even bitcoin. Accepting mobile payments adds another tool to your transaction toolbox.
In order for customers to use their digital wallet in your store, your payment processor, gateway provider and payment devices must all be certified for accepting mobile payments. Your point-of-sale account manager can help determine if your current setup is already certified for accepting mobile payments or if any tweaks need to be made.
“When merchants come to us, the certification should already be done. They’re just buying the [approved] device from us,” explained David Burroughs, product manager for payments at NCR Small Business. “With the EMV [chip] technology now, if you have an EMV-enabled payment device, it’s already going to be able to accept your mobile payments — as long as it’s certified through your processor.”
With new technology, widespread adoption takes time — but it also takes forward-thinking merchants offering mobile payments to get more people on board, said Peggy Farmer, business analyst for NCR Small Business.
“If I can use my mobile wallet at Starbucks, but can’t use it at the next three places I go to, it isn’t a habit with me,” she said. “I think once it becomes more widely available in every place you go, that’s when it’s going to catch on — and it’s probably going to catch on like wildfire.”
Burroughs agreed, adding that many consumers may be hesitant to try new payment methods due to data hacking and security concerns. But paying via a mobile device “is actually one of the most secure forms of payment that you can have because of tokenization,” the same security method used by chip cards.
“As it gets adopted more, it’s going to be a major form of payment,” Burroughs said. “It’s the way of the future.”