Payments Briefing: Can tap to mobile technology democratize payments?
- This week, we explore how tap to mobile payments could help SMBs compete with larger businesses.
- We also look at how PayPal’s failed customer acquisition strategy led to the birth of 4.5 million fraudulent accounts on its platform.
Contactless payments have been growing throughout the pandemic. The use of contactless payments has increased by 150% in the US since March 2019, and the UK recorded £66.5 billion in contactless transactions in the first six months of 2021 alone.
Amidst this shift, it’s becoming more challenging for small businesses and micro-merchants to remain competitive and retain market share against established players and tech giants like Amazon. Many SMBs are cash-only and are unable to afford feature-rich payment terminals that accept contactless payments. Processing payments on the go, in settings such as outdoor events, street vending and deliveries, can also be a challenge.
Tap to mobile technology (also known as ‘tap to phone’ and ‘tap to pay’) – which turns smartphones into payment acceptance devices – could simplify payment processing for SMBs, since it’s easy to set up and requires no additional hardware.
In order to use tap to mobile, SMB owners can simply download an app on a smartphone and create a merchant account. Once connected to the payment processor, the phone automatically receives its provisioning credentials. This allows small business owners and micro-merchants to accept payments from contactless-enabled cards or devices like phones, tablets and wearables within minutes.
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