Mobile Payment Technology: 6 new ways to take your customer’s money

The ATM on the sidewalk is dead.  Long live the ATM in my pocket.

In 1973 the first ATMs changed the way customers paid. And for 40 years they remained a vital fixture of retailers, gas stations, and banks…until now.

Now cash and ATMs are quickly losing their appeal as new technology gives almost every customer a direct digital pipeline into their bank and credit accounts. Literally, your customers are now carrying an ATM in their pocket and the impact on business will be staggering as consumers choose to use cell phones to make “mobile payments”.  Technically, mobile payments include a mix of transactions enabled by, or enhanced by, cell phones, tablet PCs and other internet-connected devices. So even if you are not a bricks-and-mortar retailer, get ready to get mobile.

Going Mobile
Juniper Research reported today that the value of mobile payments (including money transfers and Near Field Communications transactions) will hit $240 billion this year and will reach $670 billion by 2015.

Consider the following:
• More Americans are buying cell phones than land lines
• 38% of Americans now own a smartphone
• 55% of new phones purchased are smart phones

It’s easy to see why the trend toward mobile payments is skyrocketing.  Our phones are always in our pockets.

Why does this matter to you?  For the same reason that installing an ATM improved your top-line sales: Customers who have access to more money spend more money.

The Options
The question is no longer “cash or credit”, but a laundry list of options, including cash or credit … plus:

• PayPal
• Boom
• mopay
• email
• Google Wallet
• Cell Phone

If those options make you dizzy, ignoring them will make you sick from lost sales.  The day when a customer walks into your shop with nothing but his iPhone is already here. Do you want his money or not? 

The investment is worth the payout.  These services are not going to go away.  One of the newer ones, “mopay,” brags that it enables any Internet-connected device to make payments.  Think of it.  My TV is Internet-connected.  So is my game console and my phone.  Even my radio, refrigerator, and thermostats are all tied to the Internet.  Want to sell my thermostat a maintenance package or an energy audit?  The time is now.

Keep it Simple
I can hear you screaming — enough already! This is too much, too soon.  OK, start simple.  The simplest and best way that you can help your customers pay is by implementing Near Field Communications (NFC).  Think of this as a simple substitute for a retail credit card scanner.

Like its cousin Bluetooth, NFC communicates wirelessly between your credit card machine and a nearby cell phone.  It reads the account info of the (NFC-enabled) phone, and charges the customer’s phone account (or any other account he has set up).  The NFC device has to be close – about 2 inches away or less – and the user has to confirm the purchase with a PIN.

NFC literally turns a cell phone into an ATM machine.  Of course it takes new equipment on both sides – your scanner and the consumer phone have to be enabled.  But all signs point to this being the tipping point for NFC in retail and online.  In June, Google announced Google Wallet and just this week (July 5, 2011) Google watchers report that NFC capabilities are even included in the new social network called “Google Plus”.

If you only recently got an ATM, it’s understandable. It took 40 years to place 2.2 million ATMs. In contrast, there are already 302 million cell phones in the USA – more than one for every adult American.  The adoption of NFC – and the other mobile payment technologies – is happening at lightening speed.  How you react to mobile payment technology is up to you: Harness that lightening – or get struck by it.

Now is the time to be sure that you are keeping up with your customers.  Go mobile and keep the payments flowing!

Dedicated to your (Mobile Payment) profits,

David Worrell

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