Although mobile payments has been a slow-burning technology, many young consumers are beginning to prefer the smartphone payment method.
We live in the future now. You can tell a smart home device to open your garage door or turn on the lights in your home with your voice or your smartphone. Similarly, you can pay for gas, groceries or a meal out from your mobile device. It's instant, therefore convenient. But for many, it's still just a cool concept.
For most businesses, the decision of whether or not to accept mobile payments is an easy one. Small retail businesses, food trucks and Uber drivers answer a quick 'yes' to that question. However, if you're unsure of whether you should accept mobile payments because of security concerns, cost of adoption or you're worried your customers simply won't use it, then you're not alone in your hesitation.
Despite big names behind the mobile payment movement, such as Apple, Google and even Walmart, consumers are slow to use the technology at brick-and-mortar businesses regularly. A recent study by Forrester Research showed that by 2019, only 1 percent of consumer spending would be through mobile payments — that's the total of in-person, online and peer-to-peer shopping and payments.
The benefits of mobile payments are becoming more apparent to consumers as they try the method. In a study by the Pew Research Center, 42 percent of respondents said they believe mobile payment is faster and 38 percent said it's easier than other payment methods. The two biggest road blocks for mobile payments today are security concerns and consumers not being informed enough — only 9 percent of those surveyed believe paying with your smartphone is a safer method than others, and the majority of respondents were unaware of whether mobile payments are faster, cheaper, easier, more common, private or secure than other methods.
Demographics of a Mobile Payment User
Mobile payment users are overwhelmingly millennials or Gen Xers — 72 percent of the total, according to the Pew Research Center study. These younger users (ages 18 to 50 years) are quicker to adopt new technologies than older generations and they're typically more comfortable with technology. Generally, the users live in metropolitan areas and have college degrees.
If your restaurant sees this type of crowd, then accepting mobile payments may be a good choice for your business. You can't expect your customers to demand that you accept mobile payments, though, because they're still used to pulling out a debit or credit card to pay for meals.
Consumers are acutely aware of how easily their sensitive information can be compromised, so they're more cautious than ever. While many mobile payment users are excited about the technology and incentives, such as rewards and discounts, they're hesitant, too. More than 70 percent of millennials, Gen Xers and baby boomers are worried about identity theft and loss of funds from using mobile payments.
Some mobile payments are using the near field communication (NFC) chip technology, which offers a higher level of security because no card information is exchanged. This eliminates many fraud concerns.
Adopting the Technology
To begin accepting mobile payments, your restaurant needs an NFC system, which allows your reader and a customer's mobile phone to communicate through touch. A token of data is transferred and the payment is made. The NFC technology is somewhat costly compared to barcode or QR code payment processing, which you can set up through almost any point-of-sale (POS) system. Eventually, though, mobile payments will become the norm and likely more affordable, so adopting the technology early is a good idea.
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