Mobile Wallets or Mobile POS: What’s Best for Stateside Businesses?

Posted by on December 31, 2012 in Sales 2.0 [ 0 Comments ]

NFC mobile paymentsThere’s a sea change taking place in the world of payment processing. In 1997, the first recorded mobile payments were accepted when customers purchased drinks from Coca-Cola vending machines via text message. Not only has mobile payment processing grown since then, it has evolved into an even newer technology.

In large part, Europe has adopted this technology, also known as contactless payments, but it is still relatively new to the U.S. And, whether or not it will catch on stateside is still unknown because the question remains for small U.S. businesses:

Is the investment in all the hardware to enable these types of payments worth it?

It can be expensive to purchase the (NFC) Near Field Communication-enabled terminal in order to process contactless payments, and many merchants say that customers rarely use them. While extremely innovative, there are other problems, too. For example, customers must still go to the cash register in order to make a purchase.

Contactless Payment Options

Many new smartphones are being produced with NFC chips, giving them the ability to become what the industry is calling mobile wallets. Industry titans such as Google are using/experimenting with NFC in addition to their online payment methods, as well.

Companies Accepting Mobile Payments

Conversely, there are a good number of high-profile businesses that are using straight mobile payments for their convenience and versatility. Urban Outfitters recently scrapped all of their traditional POS registers to use iPad and iPod Touch devices to exclusively accept mobile payments. J.C. Penney and Nordstrom have also followed suit, and Apple has long accepted mobile payments.

Related: Using Mobile POS to Sell Your Product

Where the States Stand

While contactless payments might never catch on in the U.S., businesses are better off using a mobile payment platform that enables customers to swipe their card on a device attached to a smartphone, aka a mobile POS.

One of the greatest benefits to this is the lack of overhead cost needed to carry out the payments. All a business needs to process a credit card is a smartphone or a tablet, the application and get the card reading device.

And finally, one of the greatest benefits to accepting mobile payments is the convenience it provides customers; they can pay for items anywhere in the store, rather than just at the cash register. Associates with card-reading devices can approach customers while they are still considering whether or not to make a purchase, and potentially benefit from an impulse buy.

Proven Technology

In the end, American business owners must decide what works best for them. Is it better to risk making a large investment that might not ever come to fruition, or to make a smaller investment on current, proven, and steadily growing technology? My money’s on mobile payments.

Photo credit: bankfutura.com

Bio: Michelle Latham is a credit specialist at Switch Commerce, a credit card processing provider based out of Texas.


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