How are contactless payments faring at small businesses?
Every sector of business in America has its ebbs and flows, as well as a consistent push-pull between practices and tools that become standard and trends that end up fizzling out. The financial services industry, of course, is no exception. EMV-enabled credit and debit cards, for example, may have initially seemed like a trend, but their effectiveness made it wise to adopt them as a commonplace, essential payment technology.
More recently, the emergence of mobile-based, near field communication and other contactless payment techniques poses the question, particularly among leaders of small businesses, of whether these methods will have staying power or not. It'll be wise for owners to examine where all of these developments stand and how they might evolve.
EMV dominance established
Large-scale shifts in technique disrupt any business, and unsurprisingly, the transition from magnetic strip cards to EMV wasn't smooth at first, or fast. Small Business Trends reported that when the first October 2015 deadline for chip implementation came around and a significant number of credit and debit cards had the technology installed, only 8.33 percent of smaller companies were prepared to accept chip-based cards.
Nearly three years later, that share of EMV-equipped small businesses has expanded massively to reach about 59 percent. It has therefore become clear that chip-based cards will be the way of the foreseeable future, as far as payments are concerned. But will the same happen with NFC and contactless?
Future of contactless payments remains unwritten
As of January 2018, less than 1 percent of Visa's credit or debit transactions were being accomplished through contactless mediums of any kind, be they NFC conduits, mobile platforms like Apple Pay and Google Pay or other services like PayPal and Venmo. But this is likely to change - sooner than one might expect. Apple, in particular, seems gung-ho during early 2018 regarding its desire to promote the proprietary contactless platform it has worked on for several years.
The truest deciding factor of contactless payment dominance will be the level at which the method is adopted by small businesses, and how useful these companies' owners find it. According to Vantiv, consumers want the ability to use contactless payments, with 31.3 percent of merchants stating their customers wanted that option. Also, the security measures used within these apps feature modern security protocols, thanks to methods including point-to-point encryption and biometric thumbprint or facial ID technology.
It can be hard for small-business owners to choose what new methods to implement when such techniques make their way to the industry, be they contactless and mobile payments or alternative credit data analysis platforms. Particularly regarding the latter, resources from PRBC MainStreet can help, so contact us right away to learn more.