Did you know that 26 million U.S. small businesses are not accepting credit cards? And with more and more Americans not carrying cash in their wallets, the question we need to ask is: how are retail purchases being made? The answer is the latest trend in technology and sales: mobile payments.
The mobile payment concept is designed for businesses to accept payment without needing cash or a credit card processing terminal. The payment systems range from pieces of equipment that attach to smartphones to downloadable apps. U.S. mobile transactions are expected to reach $86.1 billion, doubling the $48.9 billion in revenue it saw in 2010, according to a recent USA Today article.
What are the current mobile payment options and what works best for your business? Here are a few products that are being met with success.
Square is one of the most well-known mobile payment devices that attaches to a smartphone. After Hello Bicycles, a Seattle-based bike shop, began using Square, its earnings tripled in one year. The retailer also loves Square because it compliments the company's eco-friendly paperless philosophy. Square charges a rate of 2.75% for each swipe and payments post within 24 hours. In 2011, 800,000 merchants accepted $2 billion in payments using Square.
PayPal On the Go is another mobile payment service that processes payments through the popular platform PayPal. This service is available as a downloadable app for the iPhone, Android and Blackberry smartphones. Where PayPal differs from Square, however, is the fact that it is not just a retail tool. PayPal on the Go can be used by individuals who want to reimburse a friend, or to make a mobile payment on eBay or another online vendor.
Intuit GoPayment is an option for mobile payment transactions with the added bonus of providing customer follow-up services. The program enables retailers to send a text or email receipt to their customer, complete with your company logo. Intuit GoPayment syncs directly with QuickBooks software for business management. Vendors pay as little as 2.7% per swipe without a monthly fee requirement.
The retail horizon is changing on a daily basis with technology and the shifting needs of the consumer. Only a few years ago, it was more likely to see someone always carrying his wallet. Now we're more likely to see him accompanied by his smartphone with the wallet left at home. And with more and more retailers accepting mobile payments, it is quite possible that cash will become as obsolete as the analog phone.
Do you use a mobile payment system? Tell us how it works for your business. What are the advantages and disadvantages?