Guest Post – Mobile Payment Systems: A Closer Look at NFC Tech and M-Commerce

By William Dawsey, Global Director of Finance and Payment Systems, Chetu Inc. 

Most merchant services providers were woefully unprepared for the EMV migration, left fumbling to outfit their preexisting POS offerings with EMV-friendly tech to keep pace with the changing marketplace.

At first, chip-technology came with a lengthy 15-sec transaction time, making the upgrade easy to forgo for consumers and merchants alike, but transaction times are down, millions of chip cards have been issued, and the global marketplace has experienced a decrease in payment fraud.

Of course, this revolution doesn’t end with EMV. Chetu experts forecast that by the end of the decade, mobile payments will surpass debit and credit cards in usage and revenue.

WHAT DO YOU MEAN BY MOBILE PAYMENT?

The term mobile payment actually translates into a two functional meanings, making being out of loop all the more debilitating.

Sometimes mobile payments refers to a transaction that takes place on a mobile device using an online shopping cart (also commonly referred to as m-commerce), and other times mobile payments describes when a consumer pays in-store using just their phone.

Both instances of mobile transaction are an integral part of the ever-changing consumer marketplace, and an elevated understanding of these emerging technologies will help prevent a repeat of the EMV scramble.

M-COMMERCE: MOBILE COMMERCE

The smartphone boom certainly isn’t a negative. Over three-quarters of Americans own smartphones, and a significant percentage of all retail revenue comes from transactions that take place on those devices.

In order to keep up with payment trends, commerce platforms should offer retailers the following:

• PAYMENTS ON THE MOVE: Developing an Android and iOS compatible mobile shopping app allows merchants to sell at their convenience, from anywhere, eliminating geographical limitations that may have previously existed. M-commerce functions most effectively when the mobile interface mirrors the desktop-version. If m-commerce users are subjected to rudimentary marketplace capabilities, they will inevitably seek alternative service from a provider with a mature UI.
• RESPONSIVE SHOPPING CARTS: Enabling merchants to service multiple channels while keeping all data synchronized into a single system is a profound feat.

Instrumenting an intuitive and intelligent shopping cart that minimizes mobile checkout time by recognizing buying habits and storing credit card information internally for future purchase encourages a greater frequency of purchase.

IN-STORE MOBILE PAYMENTS: CONVENIENCE

In 2011 Google launched Google Wallet, the first electronic wallet to market, which was followed by Apple Pay in 2014. Android and Samsung Pay emerged shortly after.

Okay, so mobile wallets store the information, but how does that information communicate with in-store POS systems? The answer: Near Field Communication (NFC) Technology.

NFC hardware allows mobile wallet holders to pay-by-tap. They simply hold their device up to the hardware to make a transaction, minimizing transaction time and making person to merchant sales incredibly efficient.

HOW TO SURVIVE THE PAYMENT REVOLUTION

Back in 1958 American Express issued its first credit card, forever-altering monetary exchange, piloting the swipe-to-pay concept that we were wary to desert for EMV. It’s difficult to imagine that at some point those small, plastic rectangles may turn into an antiquity, something we look back on similarly to how we remember VCR’s or cassette tapes.

Regardless how we feel, the payment revolution is happening and it’s progressing quickly. In order to ensure that your business not only survives, but booms during this transitional period, stay current on mobile payment trends, and if you are one of the lonely few still struggling with EMV compliance, I’d suggest knocking it all out at once.

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