Earlier this year my family took a week-long trip to San Francisco. We visited the Monterey Bay aquarium, Muir Woods, Santa Cruz and Palo Alto, and did more than our fair share of dining out during our trip. Seeing as how I’m from St. Louis, I was looking forward to seeing just how many retailers in the Bay Area had adopted mobile payments.
I have to admit that what I saw shocked me. I expected mobile payments to be commonplace, but I really didn’t see any more mobile payment systems that what I have seen in St. Louis. Out of the numerous businesses I visited, only three had tablet-based point-of-sale systems. I also saw very few people using their smartphone to make a payment. When I did see someone making a purchase with their phone, it was typically to pay for bus fare. There were many parking meters that accepted credit cards and mobile payments though, but Level Up and other mobile loyalty programs were no where to be found.
I realize that change takes time. In fact I recently saw research from Bain & Company that reported that 6.6% of consumers in the U.S. have used their smartphone for in-store purchases. Yes, mobile payments represent only a small fraction of in-store payments, but that number is definitely growing because that percentage increased by 103% between 2010 and 2013.
These numbers point out that even though adoption of mobile payments is slow, now is the time that banks need to start integrating them into their financial institution’s merchant services programs. Research shows that consumers trust banks with their data more than they trust retailers, technology companies, and alternative payment providers, so this presents a great opportunity for your financial institution to capture a share of this growing market.
Keep in mind that it’s important to provide your accountholders with choices. This way you can make sure that you will have a solution that best fits the needs of each customer, instead of trying to conform them to a one-size-fits-all approach.
Because there are numerous mobile payment systems in the market today, make sure you talk to your merchant services provider about which options are best for your customers. Keep in mind that consumers want programs that deliver extra value, such as better loyalty rewards and ways to help manage their money. And it goes without saying that whatever system you choose must be secure and easy to use. But by discussing your needs with your merchant services provider you’ll be able to pick the solutions that are right for your market.