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Mobile payments, also known as mobile banking, are a payment service that allows individuals to make financial payments or buy goods from their mobile phone as easily as they could from his or her computer.
Mobile banking allows for an alternative payment method; instead of paying with cash, check or credit cards, the consumer can pay using their smartphone, via a method that is quick, secure and hassle-free.
Customers shopping at grocery stores, especially, are concerned with getting in and out without waiting in long lines. Mobile payments make grocery store checkout lines more efficient allowing them to provide service to a greater number of customers in a shorter amount of time. Although the customer is required to have a mobile or smartphone able to handle the technology needed for this to occur, these types of phones are readily accessible and increasingly utilized.
Grocery stores want to capture every available sales opportunity they can while they have their customer in the store for the short time they do have them. Mobile banking has the ability to open new revenue streams in every aisle, increasing sales for the grocery store while increasing efficiency which results in saving time for the customer. This makes the customer more likely to return.
Finding the right merchant services provider would be a great asset for any retail business, and especially for grocery stores. This allows the business to provide a greater amount of payment options for their customers. Mobile payments will continue to grow more popular as applications and services are expanded. As customers catch on to how fast, secure and efficient this payment method is, more will be willing to use it.
A recent survey done in the United States revealed 57 percent of adults believed that mobile banking would become widely accepted and used over the next three years. Twenty-two percent stated they had not tried mobile payments yet, but they would be willing to try it. And, 47 percent said they would be willing to use mobile banking if they knew their confidential and personal information was secure. Businesses must follow the trends of the market and as mobile payments continue to grow, stores most adjust to keep the customers coming back.
LexisNexis recently reported that mobile payment acceptance among small retailers rose 2 percent last year, up to 7 percent of retailers. A reason for the small number of users among small retailers is due to the cost of setting up for mobile payments. Mainly, it costs more to ensure proper security measures are taken to guarantee a customer's information is protected. Still, that is a significant growth considering how new the technology is.
Among larger retailers, including large grocery chains, the number remained at 13 percent. However, according to multiple reports the growth of mobile payments overall is expected to quadruple by 2014. Going with that trend, many shops have begun using their own version of mobile payment systems. To wit: Starbucks recently starting accepting phone payments via a bar code that is stored on the customer's phone and linked to an account or gift card that is used to pay for the purchase.
As the use of smartphones increases, it is expected that more retailers will adapt this approach. Only time will tell if this will hurt smaller retailers in the long run due to the fact that this technology allows shoppers to make a purchase at larger stores more quickly.
It will be interesting to see the impact this technology has on small business growth across the country. It may prove to be a fatal blow for several small stores that are just getting by and can't afford to adjust to the new technological age.
Jacob Thompson is a writer for Savannah, Ga.-based MerchantSeek.com, which provides advice for retailers on choosing a payment processing company.