By the end of 2014, the majority of small and medium-sized businesses will use mobile credit card readers, according to online survey data from BIA/Kelsey.
Mobile credit card readers are small devices that attach to a tablet or smartphone, usually through the audio jack, and allow merchants to swipe credit cards and process payments without needing expensive and clunky register systems.
The survey report is based on the responses of 600 small and medium-sized businesses during the third quarter of 2013.
- 40% of these businesses said they currently accept payments using a mobile credit card reader such as Square or PayPal Here.
- Another 16% said that they planned to adopt mobile credit card processing services within the next year.
BI Intelligence defines mobile payments as “offline point-of-sale transactions powered by mobile devices or a mobile phone number, either on the merchant or consumer side.”
In a recent report, we predicted that growth in mobile payments would be driven by the merchant side.
A March 2013 consumer survey conducted by the Federal Reserve shows how the consumer side still lags in adoption.
- Only 9% of US consumers said that they scanned a barcode or QR code at a point-of-sale using a mobile phone in order to make a payment in the last year
- 9% said they used a mobile app to make a payment in the last year
- 6% said they scanned their mobile devices at a point-of-sale in the last year
It is unclear whether the phenomenal adoption rate of mobile card readers by small businesses will carry over to mobile payments on the consumer side. The largest barrier to consumer adoption of products like Google Wallet isn’t the lack of compatible point-of-sale systems. Instead, consumers seem concerned with security issues and whether there is really a tangible benefit to paying with a smartphone over a credit card.
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