Could smartphones replace credit cards? Wireless payment solutions are just around the corner. Both Visa and MasterCard announced plans to allow their customers to use their smartphones to pay for in-store purchases. Visa’s test launch program will begin this month while Mastercard closes on a deal in October with its acquisition of European payment service provider DataCash. The wireless payment space is predicted to become more than a $633 billion industry by 2014. Increasingly, mobile customers will be looking at e-commerce merchants to stay current on these new payment products.Visa will be testing a system that involves phones carrying a chip and when the phone user waves the phone over a special reader device in the store, the price of the product is charged straight to their account.
How will this impact businesses? History has shown that consumer perception about the safety of mobile commerce could be an issue. Whether consumers will consider it secure enough for them to make transactions is a big question. After all, it took financial institutions quite some time to convince consumers that online banking was safe . It could take awhile for businesses to convince their customers to use their smartphones for purchases. But once persuaded, consumers might prefer, or indeed demand, the convenience of simply using a mobile device to pay for items.
Reports also indicate wireless carriers are getting ready to enter the payment processing market including AT&T, Verizon and T–Mobile. For businesses, this could mean increased competition in the payment processing industry…a good thing for merchants. Many merchants have hoped to see the increasing transaction fees charged by credit card companies go down instead of up. Mobile commerce could be the game changer they need to bring down the merchant fees stores charge each time a customer pays by credit card.
In addition, a recent report from Adobe shows many companies plan to operate mobile-specific websites within the year. Respondents across numerous industries indicated an overwhelming preference for websites as their chief mobile commerce presence.
What do you think about mobile technology? How are you changing or preparing your business for its rise in popularity?