As widespread smartphone adoption has gone global, giants in the payments and technology space are looking to harness the devices as cheap and easily accessible commercial tools — and one company wants to use them to achieve worldwide mobile point of sale (mPOS) acceptance domination.
According to researchers, two-thirds of adults around the world regularly access the internet, and nearly 50 percent own a smartphone. As such, merchants are tapping advanced mobile devices to do more than just communicate. Smartphones are increasingly being used to accept payments from citizens looking for improved access to alternative and modern payment methods. And companies like Mastercard have been investing in smartphone-based commerce solutions to be the first to deliver it to them.
In a recent interview, Prashant Sharma, vice president and global lead for Mastercard’s mPOS acceptance team, told PYMNTS the company wants to turn every mobile device into a payment acceptance device.
Converting every last mobile device on the planet into a commercial tool may seem like a pie-in-the-sky idea, but Sharma said there’s reason to believe they could become commonly used as payment devices, especially by small- and micro-sized business owners.
While cash is still popular among many consumers in Europe, that’s beginning to change, he noted. Modern payment methods become increasingly popular, and consumers are abandoning physical currency.
“People often say that cash is free, but that isn’t really the case,” Sharma said. “There are ATM fees, bank fees, all kinds of different things — just like any other payment method. We also know that cash isn’t very safe. It can be lost or stolen, and more and more consumers don’t want to carry it with them, and won’t go to stores if they are cash-only.”
Tapping into mPOS’ global potential
Sharma pointed to statistics indicating that show shoppers in Europe make decisions on where and what to buy based on payment acceptance. Twenty-five percent of U.K. shoppers said they won’t visit cash-only businesses, and 60 percent of Polish consumers reported having abandoned a purchase because a business did not have a card acceptance terminal and they could not pay with a card.
Even outside of an increased customer base, though, Sharma noted there are other benefits for merchants who embrace modern payment methods. Accepting card payments, contactless payments and other modern methods also typically means business owners can collect data on their businesses for the first time.
“If you think about merchants that only accept cash payments, there are various things they are missing out on,” he said. “If you’re only accepting cash payments, you have no data about your transactions. You don’t know who your best customers are, [and] you don’t know what products are most popular. You’re just getting cash in and cash out. Enabling a [digital] payments solution gives you access to analytics and much more information.”
However, many small and micro merchants have so far ignored these benefits as a direct result of one overriding factor: price. According to Sharma, businesses that have only ever accepted cash often consider overhauling their payments systems an unnecessary, and even unaffordable, expense.
“It comes down to the cost of these terminals, the cost of these acceptance devices,” Sharma said. “If you [ask] a merchant who has only accepted cash to spend a few hundred or a few thousand dollars on a new payment system, it’s just not going to happen.”
But, even most of the smallest business owners already own a smartphone, tablet or other mobile device, he explained. That means the costs of new hardware or equipment is almost non-existent, giving more small and micro business owners affordable to modern payment acceptance technology.
Turning every device into a payment terminal
With considerable consumer demand in place, Mastercard is now working to make its global mPOS acceptance ambitions a reality. The company most recently debuted a range of overseas initiatives.
This fall, Mastercard worked with European company Carrefour to build a mobile payment solution allowing consumers to use their phones to avoid checkout lines at the popular retailer. It also worked with technology provider Worldpay in the U.K. to increase contactless payment acceptance.
And, in Poland, where 65 percent of consumers own smartphones and 61 want more access to cashless payment methods, Mastercard unveiled a new pilot program, designed with partners Samsung and payment acceptance provider Mobeewave, to make it easier for small and micro businesses around Europe to accept contactless payment methods. In announcing the program, Bartosz Ciołkowski, Mastercard’s country manager, noted the pilot was part of the company’s commitment “to enable every connected device to accept payments.”
In his interview with PYMNTS, Sharma said Mastercard hopes to enable 40 million small merchants around the world to accept contactless payments by 2021, and the company’s commitment to do so comes largely from its belief in the future. After all, according to Sharma, if small businesses do not accept and adopt technology, they will never reach their full potential.
“If you think about those small and micro businesses, they’re a huge sector of the economy and they really help push financial inclusion and technology adoption forward because of that,” he said. “So, it’s crucially important for us to bring those small and micro businesses into the modern payments ecosystem, and that’s what we’re working to do.”
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The PYMNTS mPOS Tracker™ is readers’ go-to resource for staying up to date on a month-by-month basis. The Tracker highlights the contribution of different stakeholders, including institutions and technology coming together to make this happen.