The last decade has seen extraordinary changes in how customers pay for goods and services.
The rise of contactless technology means that transactions have never been easier, and mobile payments, although initially slow to take off, pave the way for a future of convenience for both businesses and customers alike.
But how can you ensure that your business is well positioned to boldly enter this brave new world of rapid transactions? Here, we explore the measures you can take to keep ahead of the curve.
Bracing for the NFC boom
Near-Field Communication promised to revolutionize the way transactions take place, but was slow to take off. The current estimates, courtesy of Apple Insider, place the volume of iPhone users taking advantage of Apple Pay at around 16%. This figure seems modest, but it equates to 127 million users globally – which is a far cry from Loup Ventures approximation of 62 million users at the end of 2016.
Like with many new technologies, the public has been slow to break with their old payment habits, but the rate in which users are adopting mobile payments has led Finance Magnates to forecast that up to 75% of all transactions will be made without cash by 2025, much of which will be via a smartphone.
Millennials have been quicker to embrace NFC technology, which has led to confident forecasts pointing to a future of mobile transactions. Such is the confidence in the widespread acceptance of alternative payment methods that Inc.com and Due.com last year ran stories declaring the death of cash – in a narrative explaining that paper money was the king of the previous century.
Supporting the seismic shift to a cashless society is a large portion of Scandinavia. Sweden believes it has the infrastructure to go cash-free within five years, while Denmark has pledged to step away from the usage of paper money by 2030.
Due.com’s Angela Ruth goes far enough to state that mobile transactions are actually more secure than cash and with more opportunities for rewards and incentives. Ruth also highlights that paperless transactions typically help people to track their budgets and cash flow too.
How to prepare
The UK Cards Association has produced an in-depth guide on how businesses can prepare for a contactless future, which carries an emphasis on mobile payments. However, setting your business up for smartphone transactions is easier than you might think.
Firstly, you’ll need to make sure that you have a payment terminal that’s capable of receiving NFC payments, and that you’re set up to a payment processor that’s capable of processing your transactions, be it online payments or in-store payments.
When it comes to in-store purchases, there are plenty of NFC terminals that fulfill different roles, so it’s important to have a little bit of introspection before committing to a device.
If you run a business that’s oriented around over-the-counter sales, then a fixed terminal like Ingenico’s iCT250 is perfect and secure, while if you’re a restaurant, for example, and travel to customers to process payments then a portable device such as the Ingenico iWL252 would be ideal. Alternatively, there are plenty of lower budget contactless card readers that do a great job for startup companies.
Like with all contactless payment methods, staff will require some training in order to adapt to mobile transactions without hindering customer experience. It shouldn’t take much time, but considerations will need to be made for the handling of NFC devices and setting payments up.
Businesses will also need to adapt their policies on handling declined payments and how they notify customers that the option of mobile pay is available (this could be advertised inside or outside the store, and stickers are available to be bought and placed in a prominent location).
The sheer convenience of mobile payments could force a rethink in staff roles within the company too. If you run a business that frequently needs to handle queues in-store, the transition to a much faster payment process may mean that less staff will be required behind counters – leaving more room for roles in other areas.
Work big data to your advantage
By embracing mobile transactions, you’re also opening your business up to a wealth of data surrounding customer behaviour.
Through this medium you can collect data, thanks to the transaction itself, and automatically gain an understanding about how often customers are making purchases in your store, at what time, and during which season.
This enables you to create offers that are based on the information you have, to be dispatched at the most opportunistic of times – opening the door to a level of dynamism that wouldn’t be possible through cash-only purchases.