Commentary

Mobile Payments a 2-Sided Coin

The large-scale adoption of mobile payments faces customer sat issues on two fronts.

Any mobile payments discussion generally involves the issue of why a consumer would pay via mobile device, since credit cards and cash work fine enough.

But there’s another side of the coin, focusing on merchant acceptance and implementation.

I was reminded of this yesterday in a comment from a reader of my recent blog here on The Challenge of Mobile Payments at Small Merchants. As many taxi drivers already use various mobile payment platforms, this reader from Paul’s Taxi uses Square. He relates his recent experience:

“Count me as one of the 64% that is very satisfied with our credit card acceptance through Square. With our other credit card processors, we have had nothing but hassles, hidden fees, ever-green clauses, which make it impossible to cancel services, etc. I could write an essay about accepting credit cards from standard vendors.

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“One story will suffice. Out of the blue, some representative from my credit card processor called me on the phone and said that because we have had no complaints and no charge-backs, we qualify for lower rates. I sat down with the charlatan, and over coffee, he showed me a whole bunch of numbers I did not understand or comprehend. But at the end of it, he said I'd be saving a good deal of money. So I updated my credit card program per his recommendation. (Remember, I was not switching vendors; just updating my current contract.)

“The net payment to the credit card company went up by 10%, not down. I was over the moon with anger at this man. Needless to say, we switched to Square, which has no monthly fees, and no contract. And their processing fees are very competitive. And you can quit them at any time.

“Square is the only honest credit card processing company I have ever run into. Personally, I wish nothing but curses on the rest of the entire credit card processing industry."

The consumer and the merchant may view this elephant from different angles.

A consumer using a mobile wallet, for example, is perhaps conscious of it only at each transaction. They may judge success on factors such as ease of use and added value.

The merchant, on the other hand, is judging mobile payments overall, since they are measuring all transactions, with all the associated costs.

The successful mobile payment platform, whatever they end up being, will have to satisfy two masters.

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OMMA mCommerce, July 15, New York. IHG, MasterCard, Joule, ScanBuy, Huge, Spyderlynk, Rue La La, BYNDL, Catalina, Giant Eagle, Payvia, Ansible, Moxie Interactive coming. Here’s the AGENDA.

4 comments about "Mobile Payments a 2-Sided Coin".
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  1. John Vail from PrizeLogic, June 18, 2013 at 1:22 p.m.

    Chuck, nice piece...no doubt that Square should be ensuring that Paul's Taxi is on the "nice list" come holiday time!

  2. Bill Carter from Starlink, June 18, 2013 at 3:05 p.m.

    Hopefully the big guys will take note.The system works better for the consumer than the vendor, as I have no complaints.It will be interesting to see how we evolve. In Europe the locals can put their phone on a dock by the cash register and charge to their phone, bank or credit card (hands off) but I have no idea how that effects the merchant. Works for my credit card, too.

  3. Chuck Martin from Chuck Martin, June 18, 2013 at 8:08 p.m.

    Thanks for added insights, Bill. Good point that various countries are at different stages of mobile payments, both technologically and behaviorally, most notably some in Asia as well.

  4. Chuck Martin from Chuck Martin, June 18, 2013 at 8:08 p.m.

    Thank you John. Yes, that may have put him near the top of that list.

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