As the payments ecosystem evolves, it’s becoming more challenging for small businesses and micro-merchants to remain competitive and retain market share. Many of these businesses are cash-only or have limited resources to dedicate to feature-rich payment terminals that accept contactless payments. Additionally, processing payments in the field (e.g., events, street vending and deliveries) can be challenging with unwieldy hardware that’s difficult to carry around for on-the-go payments.
Enter tap to mobile (TTM): a technology solution that turns smartphones into payment acceptance devices.
To use tap to mobile, SMBs and micro-merchants need only to download an app on a commercial off-the-shelf (COTS) smartphone and then connect to an approved payment processor. Once connected to the payment processor, the phone automatically receives its provisioning credentials. This enables SMBs and micro-merchants to accept contactless payments from contactless-enabled cards or devices like phones, wearables and tablets within minutes.
Strong support for tap to mobile payments.
While TTM technology is cutting-edge, a recent NMI survey of 300 small business owners and 1,000 consumers in the U.S. and U.K. shows that there’s a market for tap to mobile payments. Indeed, 95% of SMB owners said they would consider using tap to mobile payment technology, including 92% of current cash-only businesses.
Additionally, 83% of consumers said they would likely use tap to mobile payment if offered by a business. And 85% said they would be more likely to shop at an establishment that offers tap to mobile as a payment option.
The top factors that would influence SMB owners’ decisions to offer tap to mobile payments for their businesses were:
Cost (i.e., cost of the technology, maintenance, etc.): 66%
Customer demand: 55%
Security (i.e., the security of business and customer transaction data): 54%
Benefits of Tap to Mobile
Existing TTM solutions address all three of the above concerns. First, tap to mobile requires a minimal financial commitment. The solution runs on smartphones that many people already own and only requires businesses to download an app — there’s no need to purchase additional equipment.
Second, consumers have a clear desire to use tap to mobile. Of consumer respondents who said they’re more likely to shop at a business that offers tap to mobile as a payment option, the top reason they would be more likely was convenience (76%), followed closely by speed (73%). Moreover, the top shopping situations consumer respondents said they’d most likely pay with tap to mobile were restaurants, deliveries and events.
Finally, concerning security: Tap to mobile must adhere to a rigorous data security standard outlined by the PCI Security Standards Council, a global forum of payments industry stakeholders that develops and encourages the adoption of data security standards for safe payments.
Tap to Mobile: What’s Next?
Tap to mobile is set to revolutionize the entire payments industry by democratizing payments. As a result, hardware and system costs no longer need to be barriers to entry for SMBs and micro-merchants looking to build up their businesses. And with contactless payments becoming more universal among consumers, the arrival of tap to mobile can create revenue opportunities for SMBs and micro-merchants in this evolving business landscape.
NMI is at the forefront of developing tap to mobile solutions, and we’re ready to help power the next generation of entrepreneurs. Whether you are a payment solution provider or an ISV looking to expand your app’s payment capabilities, we’re ready to serve as your trusted partner. Contact us today to learn more.