he smartphone inyour pocket couldbe set to replacethe mobile cardpayment terminals

you may already be using in yourbusiness. After sweeping thebusiness payments market in theUS, thanks mostly to the successof mobile payment serviceSquare, which showed that thesmartphone could become asecure mobile paymentterminal with the addition ofsome hardware and anaccompanying app, the samepayment trend is tipped tohave similar success in the UK.

What these new paymentsystems offer is a chance foreven micro enterprises to takeelectronic payments. In thepast this may have simplybeen too expensive tocontemplate, but nowincumbent banking systems,with their integrated cardpayment terminals, are notthe only option if yourbusiness wants to offermobile card paymentservices.

T CONVENIENCEWith vastly reduced costs and infinitely moreconvenience than traditional systems, smartphonemobile payment systems look set to herald a new erain business payments. Says Daniel Klein, CEO ofmobile payment company SumUp: “A lot of smallbusinesses are operating on very tight margins andcan’t afford to lose out on making a sale because theycan’t process a card payment. However, they are all toooften discouraged from partnering up with banks andrenting conventional payment terminals because of theexpense and difficulty inherent in doing so.

“Our mission is to reduce the expense, remove thedifficulty and make it possible for every merchant -no matter how small, unique, or mobile their business- to accept card payments. We’re taking the pain outof taking payments and we’re helping small merchantsto build stronger relationships with their customers.”

Retailers who want to tap into this commercialspace can now do so for very little initial outlay. Andwith individual transaction costs being kept low by theentrants into this market, small business owners couldsuddenly have a new payment channel.

UNLOCK“The iZettle platform and solution demonstrate what can

be supplied without demanding retail capital investmentand unlocks the market for millions who would not orcould not previously take cards,” says Stewart Roberts,managing director of iZettle.

“The revolution may be starting with paymentacceptance, but will ultimately be in the face to face retailworld. Existing retail hardware and infrastructure providerswill need to reinvent themselves successfully to compete

with multiple small, agile and hungry new entrants. Andwhile some new entrants will fall by the wayside, Iexpect some existing providers may also join them.”

Chris Minas, managing director at mobile agencyNimbletank, adds: “The main pitfall I see at the momentis consumer concern with security standards creating apotential barrier for adoption. This is compounded bythe fact there are a few global players and several newindependent players hitting the market all withdifferent standards for different parts of the world.Until this settles and is clear in the mind of the

consumer on which is safe and which is not, I do notthink mobile payments will take off quite as fast as

some people may think.”Security concerns will always be an issue with any

new payment technology, but if the key vendors such asmPOWA, SumUp and iZettle can assure their users that

robust systems are in place, these methods of paymentcould become highly popular.

Mobile moneyThanks to the smartphone, a range of mobile payment systems is nowavailable, but what advantages do they offer retailers? Dave Howell reports

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“WHAT THESE NEW PAYMENTSYSTEMS OFFER IS A CHANCE

FOR EVEN MICRO ENTERPRISESTO TAKE ELECTRONIC PAYMENTS”

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WILL PLATFORMS LIKE MPOWA, SUMUP AND IZETTLE REVOLUTIONISE HOWRETAILERS ACCEPT PAYMENTS?Not in themselves. They all seem to be variants on ways offacilitating existing payment methodologies and businessmodels. Truly innovative solutions, such as near fieldcommunication payment schemes are more likely to be‘revolutionary’ if they can get enough traction among customersand retailers and if they can deliver a business model that worksfor payment systems, retailers and customers.

WHAT IS THE BIGGEST DOWNSIDE TO THECURRENT MOBILE PAYMENT SYSTEMS?The biggest issue is that not enough people are using themor, if you’ve signed up, there aren’t enough places to use thesolutions. I have enough trouble trying to use my Amex cardwithout fighting to get shops to accept somethingcompletely new.

Even recent NFC trials seem a bit hit and miss, withretailers like Boots recently switching out their NFC cardterminals. Devices containing the technology are few and farbetween and the cost for many retailers of completelyupgrading an EPoS system with no guarantee of uptake - oreven that NFC will be the ultimate technology solution - isgoing to hold adoption back.

And then when Apple, the world’s innovation leader formobile, bets consistently against NFC with its productlaunches - Apple’s reasoning behind Passbook is that it createsa frictionless experience by delivering barcodes within appsand negates the need to install millions of readers for NFCchips - you have to seriously question what the solution will be.This is VHS versus Betamax replayed for the nth time and weknow that technological superiority doesn’t always win. 

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Q&A Jason Cross, marketing director at mobile marketing specialist Incentivated

IS THE INDUSTRY SATISFIED THAT ROBUST SECURITY IS IN PLACE?Internet Advertising Bureau research suggests thatconsumers are less worried about this aspect of newpayment systems. I suspect the issue will be more whetherthe credit card companies or clearing houses are satisfied bythe security offered in order to honour payments madethrough these systems. If they are happy, then the rest of thepayment chain will probably fall into line. If customers startto lose money through fraud - and claim this back, aspayments were made by card - I can see card companieswithdrawing support quite quickly.

THERE ARE NOW A NUMBER OF EPOSSYSTEMS THAT ARE IPAD BASED. IS THEFUTURE MORE INTEGRATION OF TABLETS ANDSMARTPHONES INTO THESE PLATFORMS?This could easily help out smaller retailers, assuming the appsystems are cheaper and as secure as renting moretraditional card reader technology from the card companies.If retailers can increase their margins slightly by havingcheaper card acceptance tools, these solutions may multiply.

Additionally, if you can align customer relationshipmanagement and customer databases with these apps it maywell be possible to create much more quickly and cheaplysome truly innovative customer loyalty options for retailers.Recognising a customer as they enter a shop, for example,through a highly localised in-app link might allow retailers togreet customers by name, understand what they bought ontheir last visit or what they buy regularly. They may also beable to highlight any relevant special offers or ask about anevent that a present may have been bought for, using tech toreach that holy grail of the old fashioned corner shop.

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