Accepting Mobile Wallets in a Multi-platform World: What’s a Merchant to Do?1
The U.S. payments ecosystem is evolving as NFC contactless and cloud-based mobile wallet technologies are offering consumers a streamlined payment experience and unique loyalty benefits. While few doubt the benefits mobile will enable, many merchants wonder which technology to accept at the POS as BLE, NFC, QR-code, and barcode-based technologies are all being evaluated by mobile wallet providers.
At the same time, the U.S. is in the midst of the migration to secure EMV chip payments, the industry’s biggest transformational overhaul since the introduction of the magnetic stripe in the 1970’s. As a result, merchants facing terminal upgrades to accept EMV chip cards are faced with a question: what mobile payment technologies should I accept in-store?
The best advice I can give to merchants is to make the investment once, and future-proof yourself as much as possible by turning on contactless at the point of sale. Rather than investing in terminal upgrades every few years to accommodate new developments and customer demands, look at standard “World Terminals” that meet the requirements for contact EMV, contactless EMV or Mobile EMV, which enable “Tap-and-Go” payments. This investment of a few dollars will pay dividends far into the future as deployments of Mobile EMV technology continue into the next decades.
While cost is always an issue, the incremental cost of turning on contactless at the point-of-sale, versus choosing to keep it inactive is negligible compared to the benefits merchants will gain in checkout speed, incremental spend and cash displacement. True, the business case failed in the U.S. 10 years ago when initial contactless tap-and-go payments were compared to the blazing fast, but highly vulnerable, “mag-stripe swipe” speeds. But today, the move to EMV will prevent pre-swiping the card while the cashier is still scanning items. Instead, consumers will be prompted to insert their card once the entire basket has been scanned and the total has been computed. Contactless EMV and Mobile EMV — both of which enable consumers to “tap-and-go” will speed up the transaction significantly. And this strategy allows merchants to accept the form of mobile payment that will dominate face-to-face transactions for at least a decade (I’m guessing it’s closer to 20 years than 10).
Ask your POS partners what options they recommend for turning on contactless capabilities right away. When it comes to terminal decisions for merchants: do it once, do it right, and secure the next 10 years by accepting EMV payments in all its forms, especially Mobile EMV.