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Is your business mobile friendly?

Merchants are saying "not now" to mobile-optimized websites, "maybe" to mobile registers and "no thanks" to mobile wallets, according to a recent survey from ControlScan, a company specializing in payment security, and TransFirst, a transaction services provider.

The June 2013 report ("Small Merchants and Mobile Payment: 2013 Survey of Technology Awareness and Adoption") revealed that, as a group, small- to medium-sized merchants are not evolving their businesses to capitalize on the growing popularity of mobile devices. And, while merchants have many reasons for hesitating, they need to adapt to remain competitive, experts say.

Lost business with websites not ready for mobile
More than 1,600 merchants took part in the survey, which included brick-and-mortar businesses, e-commerce businesses and businesses that use both forms of sales.

The survey's most significant finding was that two-thirds of small merchants' websites are not optimized for people using cellphones, tablets and similar devices to shop. Almost half -- 49 percent of merchants -- have not taken steps to be mobile friendly, and another 17 percent are unsure whether their websites are mobile-ready or not. infographic-mobile-website

Merchants without mobile-friendly websites may be losing significant business, according to the survey analysis. It cites statistics showing that 48 percent of online shopping was done via a mobile device in the first quarter of 2013. Challenges during the payment process can cause two-thirds of prospective mobile shoppers to abandon their online shopping carts.

So why aren't businesses in a rush to optimize their websites for mobile devices? Businesses that have not done so say that:

  • There is no compelling reason to make that investment (57 percent).
  • Customers aren't asking for the service (43 percent).
  • There's no time to implement the changes (19 percent).
  • It's too expensive to implement (15 percent).

 "Their mindset is, 'Three years ago I had a website made and I was fine,'" says Craig Tieken, director of product at TransFirst. "They think they're still fine because they don't have the data in front of them to show them otherwise."

Tieken said that merchant account providers can help by providing their merchant customers data that show where website traffic is coming from (PC vs. mobile devices). Only 18 percent of survey respondents currently do such tracking. In addition, merchants should check how their websites look on mobile devices, which will help them understand why potential customers move on if sites take too long to load or are too difficult to navigate. Google has a free site for checking how a website appears on a mobile device.

Even merchants who don't expect customers to make purchases on a mobile device could hurt themselves by failing to optimize, Tieken says.

"Somebody may not be buying directly from your website, but it is influencing when they buy from you," he says. "A search for what they want to buy oftentimes starts off on a mobile device, even if they purchase it on a PC later in the day back at their home."

Tablet payments, meanwhile, are taking off
When there's money to be saved (and made), however, merchants are giving mobile technology a chance. That's why more small merchants are using tablets and smartphones instead of traditional registers at checkout.

As of now, only 17 percent of merchants with some form of physical sales currently use a mobile device for processing payments, the survey found. But adoption of this technology is taking place at a fast pace, increasing by 70 percent between 2012 and 2013. Mobile devices used include iPhones (53 percent); iPads (34 percent); Android smartphones (33 percent) and Android tablets (7 percent).  The survey analysis predicts that more and more of these transactions will be done by tablet.

The most common reason that merchants give for using mobile payment solutions is that it allows them to accept payments from any location (73 percent). They can also expedite the checkout process (27 percent), reduce credit card transaction charges (22 percent) and reduce expenses by letting merchants avoid buying a traditional terminal or POS system (19 percent). Square is the most commonly used mobile payment solution (60 percent), followed by PayPal Here (19 percent) and Intuit GoPayment (17 percent).

Heavy marketing by mobile payment solution providers has helped drive their acceptance by merchants, says David Abouchar, ControlScan's senior director of product management.

As options for merchants grow, the dongles of yesterday may go extinct. Those plug-in swipe devices (which Abouchar calls "generation one" of mobile payments) don't provide many opportunities for customization. The way of the future? Tablets tricked out with customizable features.

"What you're seeing now is a lot of rich functionality that is being delivered in the generation-two solutions," Abouchar says. "A lot of them are geared around tablets, and they lend themselves to adding different accessories and features. We fully expect that this option will continue to grow."

Little love for mobile wallets
While merchants are increasingly allowing customers to swipe their cards through a tablet or smartphone, only 3 percent of merchants surveyed can handle customers who want to who tap their smartphones or scan a barcode to make payments. Almost half of merchants (47 percent) have no intention of incorporating mobile wallets in the foreseeable future, primarily because they aren't getting the demand from their customers for this service.

"There's a variety of reasons why there is little to no traction right now," Abouchar says. "It's incredibly fragmented; there is no standard wallet out there. There are a lot of different technologies, and consumers like predictability."

Tieken notes that there are currently between 100 and 125 different wallet initiatives going on in the U.S. 

"The market has got to come together with a couple of winners; people need to gather around a couple of technologies that are going to do more and not hundreds of technologies trying to do more," he says.

There's also no infrastructure at present to combine mobile wallets with offer redemption and loyalty point accumulation, which would be the most valuable features for merchants.

For these reasons, widespread use of mobile wallets is unlikely to occur anytime soon.

"My guess is that it's still three to five years before we start seeing significant adoptions of this technology," Abouchar says.

See related: Technology lets customers skip checkout line

Published: July 29,2020

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