Mobile payments: Can they really be invisible?

Mobile payments: Can they really be invisible?

By John Shapiro, director of product management for payments, Intuit

Getting paid is a vital part of every successful small business, but no one wants to have to think about the mechanics of payments.

Customers want a seamless payment experience and aren't interested in knowing how the transaction gets fulfilled—they simply want it to work. Meanwhile, small business owners don’t want to deal with the hassle of payments processing, preferring to focus on what got them into business in the first place—delivering valuable goods or services. The good news? As more consumers trust mobile payments to manage their transactions, the payments experience will essentially become invisible—creating a simplified, frictionless mobile checkout for both parties involved.

How are mobile payments changing?

As connected devices continue to grow in adoption, technology will help payment solution providers not only improve their platform, but also take out the middle man. Direct partnerships with more mobile platforms create an all-in-one approach—consumers are able to pay a business directly, rather than their bank, and businesses have easy access to the cash they need in return.

Gartner forecasted that there will be 6.4 billion connected devices worldwide in 2016, up significantly from 2015, and the number is expected to reach 20.8 billion by 2020. If you're noticing that this is well more devices than people, you're right—connected devices and sensors will permeate the environment, unlocking improved and simplified experiences. By offering more convenient ways for consumers to use these devices to complete a payment, the payments part of an interaction will become truly invisible to both the consumer and small business. No longer will businesses be concerned about how they'll get paid—consumers will be able to use their mobile wallets or connected devices to complete their transaction, helping small businesses get paid faster and improving convenience for both sides. However, as more companies look to bring payments to connected devices, a new set of challenges will arise for both businesses and consumers.

Who is changing mobile payments?

The proliferation of technology and emergence of connected devices have created an opportunity for companies not previously associated with payments to expand their product offering. This is disrupting how payment solution providers think of traditional competitors as a result—forcing them to expand their product offerings, and consequently giving consumers more ways to make a purchase.

For example, Fitbit recently acquired Coin's wearable payments platform to bring an integrated payments experience to their wearable fitness trackers. Although Fitbit has yet to release its payments platform—and it likely won't show up in their devices until at least next year—it's not hard to see them joining the crowd rushing to make the physical wallet obsolete. Creating seamless payments experiences through wearable devices will certainly change the way consumers and businesses interact with each other in the near- and long-term.

Why isn't there more adoption of mobile payments?

Although these new solutions are attractive, they don't always solve a real problem. Pulling a credit card out and swiping it may be antiquated, but still quite a simple and elegant solution. In many cases, a watch, ring, or bracelet with NFC isn't all that much better. At the end of the day, a credit card can't be out of battery. Although, the adoption of EMV chip cards and the associated increased transaction time may breathe new life into contactless options.

On the other side of mobile payments, there are apps that let small businesses plug a reader into their phone's headphone jack and start swiping away. Over time, early traction in the space led to a cascade of dozens of options. Most only solve for money coming into the business, completely neglecting money flowing out of the business. Business owners soon realized that payment processing on-the-go was useful, but they really were looking for a mobile command post to understand how their business was doing and make smart decisions anytime, anywhere.

Even with the current mobile payment solutions available, there are growth opportunities to make those platforms even better:

  • Seamless user experience: Offering a consistent user experience is becoming increasingly important. Too often consumers are limited by the payment platform itself—if a business doesn't accept it, consumers aren't able to complete the transaction.
  • Incentives for users to adopt: Offering a loyalty program or other customer benefits that have a practical application will encourage adoption among consumers.
  • Easy transition for merchants: For businesses, transitioning to a new POS system can be expensive and challenging to learn. Creating an easy, straight-forward offering will help businesses adopt new and emerging payment technologies.

Is it right for you?

Businesses will adopt new payments technology if their customers ask for or are adopting it, while new solutions should fit into consumers' natural habits and solve a real problem. Trying new technology can be scary, but it also offers more data to make better decisions—businesses will be able to garner valuable insights on customer behavior, better manage their inventory, and discover growth opportunities. Meanwhile, consumers will be able to better track their favorite purchases and simplify their financial lives. Creating connected experiences will continue to be a key theme in the mobile payments industry, but knowing how to leverage those experiences will truly disrupt the industry.

About the author

John Shapiro is the Director of Product Management, Payments at Intuit, where he is responsible for enabling small businesses to quickly and easily get paid by their customers. He is a software enthusiast with a strong engineering background and business mindset, which guides his team to relieve the complexities of payment processing solutions for small businesses. Previously, he was the Group Product Manager for QuickBooks Online where he led the Core Workflow and First Time Use teams to improve the user experience and streamline workflow. Before Intuit, John was at Adobe where he was the original product manager on Creative Cloud, founded and led an internal startup to help websites drive repeat traffic via notifications, and participated in a consumer creativity incubator. He started his career at IBM and Google. John holds a BS in Computer Science from Stanford University and an MBA from Harvard Business School.

Topics: Card Brands, Contactless / NFC, Handsets / Devices, HCE, POS, Trends / Statistics

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