Technology is reshaping the ways that people shop and spend their money. While stores could once get by accepting only cash or checks as forms of payment, businesses have gone on to invest in debit and credit card readers over the years. These days, virtually every retailer and service provider has upgraded to taking paperless payments.
Now, thanks to mobile banking, more businesses will need to start adapting new technologies to increase their sales potential again.
Consumers push for more payment options
According to a study conducting by Bankrate, 2 out of 5 consumers carry less than $20 in cash each day. Nine percent of those surveyed said they don't really carry cash at all on a daily basis.
While most people still use cash, and experts agree that electronic payments are unlikely to replace cash altogether, the fact remains that many consumers do prefer not to use it. Credit card and debit spending is easier to track, thanks to online banking, and the ability to cancel lost or stolen cards provides a security value that cash cannot offer.
The businesses that are holding out and operating as cash-only establishments are thereby alienating a large part of their potential consumer base. If a shopper sees something he likes in a store but only has his card on him, he's likely going to purchase it somewhere else before he leaves to visit an ATM and return to the business for his item.
While most small business owners are already running with this in mind, new payment trends could be growing to create a similar issue. Smartphones have become such an advanced, integral part of many people's day-to-day lives, mobile wallets have a lot of appeal.
"Seventeen percent of consumers reported using a mobile payment option."
Upgrading to accept mobile payments
According to the latest Consumers and Mobile Financial Services report by the Federal Reserve, 17 percent of consumers said they used a mobile payment option to purchase goods and services in the preceding 12 months. Three percent of consumers had even reported using text messages as a way to spend money in the last year.
The study also found that many consumers prefer to have their shopping incentives on their mobile phones. Thirteen percent of consumers said they already use smartphone apps to store gift cards, collect loyalty points and track memberships, while another 19 percent said that they would like to use mobile phones for the same purposes.
For small businesses to meet these growing customer needs, they need to upgrade their payment technologies. Statista reported that the average person who uses mobile payments is between 30 and 44 years old and has a higher than average yearly salary. This consumer base can be a good source of income for businesses that are prepared to meet their needs.
Payment scanners that can read phone screen barcodes and specialized app systems are necessary for accepting these payment options. While mobile phone payments are still in the minority, their use is slowly growing. Businesses who get in on the trend early can start reaping the rewards of giving their customers options ahead of their competitors.
Equipment and business industry piece brought to you by Marlin Equipment Finance, a nationwide provider of commercial lending solutions for small and mid-size businesses. Marlin's equipment financing and loan products are offered directly to businesses, and through third party vendor programs, which include manufacturers, distributors, independent dealers and brokers in the security, food services, healthcare, information technology, office technology and telecommunications sectors.