The Time Is Now for Mobile Payments
NEW YORK (TheStreet) -- The time has come for business owners to accept that mobile payment systems are gaining in acceptance and that if you're not already on board your business is in danger of being left behind.
Wednesday's announcement that Starbucks
Up until now, Square had pitched its mobile payment system primarily to small merchants, but the Starbucks announcement means the company and the concept have arrived, says Stephen Burke, vice president of mobile at Resource Interactive.
"Square works. Its transaction costs are lower, it's secure and it's just going to get better as they raise additional capital and begin to build out
It's also fair to say that before the Starbucks backing of Square, the mobile movement had been talked about more than it had actually been embraced.
The partnership will also "accelerate the ability of small businesses to grow with Square's innovative technology and a stronger and more widely available Square network," the companies said in a release.
For Starbucks, the move is a logical one. Burke points to consumers' morning coffee fix as a perfect example of where the proliferation of mobile payments seems to be flourishing: daily repeated, small, secure transactions.
"This is kind of drip, drip, drip exposing the American consumer in a very utilitarian, effective way. It will have an impact on small business," Burke says.
Even if a small business isn't 100% convinced of mobile payments, it can't hurt to experiment.
The partnership with Square will also have benefits for other local merchants that are simply located near a Starbucks, given that the application has a GPS location device.
"Square is going to message
Other mobile players
Square isn't the only mobile services provider aiming to take a bigger piece of the growing mobile payment space. From MasterCard
Small businesses may find Square's option cheaper than using Visa, MasterCard, Discover or American Express, which have more complex pricing structures. A merchant will pay a flat 2.75% if they use Square's app or hardware to swipe a card. (Of course the fee is more if the transaction is keyed in.)
"Square is a lot cheaper for small merchants on small-ticket items, particularly after Visa and MasterCard raised their debit processing fees on small businesses," says Anisha Sekar, vice president of credit and debit products at NerdWallet, a credit card comparison website.
This doesn't imply small businesses should blindly jump into the mobile payments arena. Most importantly, decide if integrating mobile payments is right for the business and its customers.
"Before you jump into any of this, see how you're customers would like to pay," says Peter Shankman, social media strategist, adding, "They need to do what works for them and their customers."
For instance, similar to the payment concept being used by Apple
NerdWallet's Sekar tells businesses to proceed with caution.
"I wouldn't recommend that a small business rush to get Square simply because of Starbucks," she says. "Mobile payments have yet to catch on among older consumers and many remain leery of security concerns. Moreover, this is a relatively new technology, and small businesses that don't have the time or resources to follow developments closely may find themselves whipsawed."
-- Written by Laurie Kulikowski in New York.
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