CEO Perspective: Mobile Payments Open Doors for Micro-Merchants

Jason Oxman
July 16, 2013 – Summer means tourist season, and an influx of visitors to cities around the world. Thousands of micro-merchants will be catering to out-of-town guests over the next few months, from t-shirt stands to food trucks. Traditionally these vendors have only accepted payment in cash or check. Many of these businesses lose customers as a result, since a growing number of people simply don’t carry cash. But now, thanks to rapidly developing advances in electronic payments and the proliferation of cell phones, many of these merchants can utilize mobile devices to take payment.

There are more than 21 million businesses in the United States with just one employee. Many of these businesses operate out of a truck or a car, instead of remaining in a fixed location. While the trend in the United States started off with the rise of food trucks in major cities, it has taken off among other businesses as well, from auto and phone repair to fashion. These businesses are especially popular because of their versatility and convenience; customers can have the business come to them, rather than adding it to their long list of errands.

Currently, about 70 percent of micro-merchants in the U.S. do not accept credit card payments. Mobile payments solutions open doors for these small merchants, and provide the opportunity for them to grow their customer base. These payments give customers more flexibility to pay without cash, using their credit cars, smartphones or even just their names and faces, depending on the technology micro-merchants choose to implement.

The opportunity for growth is even bigger internationally than in the U.S. With tools like Square and Intuit, mobile payment acceptance is spreading rapidly throughout the world, especially among micro-merchants. Globally, mobile payments account for 14 percent of payment transactions. Currently, Africa is leading the world in mobile payments, in large part due to the lack of banking infrastructure on the continent. The Asian Pacific region is forecast to overtake Africa by 2016, reaching $165 billion in mobile payments.

More, the growing ubiquity of mobile devices on the global level is changing the face of business transactions. There are currently some 6 billion active mobile phones around the world, and that number is expected to reach 7.3 billion by 2014. This offers payment providers a unique opportunity to make payments accessible to everyone.

Mobile payments offer flexibility to vendors of all sizes. Even individual vendors can use mobile payments technology to accept payments and expand their sales, from Girl Scouts to farmers selling produce to artisans at weekend flea markets. The rapid development of mobile payment technology levels the playing field for merchants in countries all over the world, making it possible for businesses large and small, brick-and-mortar or on the go, to accept payments anywhere in any form.

[spacer height=3] [divide] [spacer height=3] Jason Oxman is the CEO of the Electronic Transactions Association.