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Card payments remain relevant in an increasingly mobile world

Monday, May 15, 2017

by Paycorp Holdings - ATM Solutions Group

The cash versus card debate is ongoing. Several studies (like this one) show that cash is here to stay and reports such as the one published by The Nilson Report indicate that cards aren’t going anywhere, either. But with the boom of each new payment method there’s no shortage of thought pieces asking if a new payment method will spell the end of another. The rise of mobile payments and mobile wallets has many wondering if physical card payments will decline now that all consumers need when they leave their homes are their smartphones. We doubt that mobile payments will eclipse card payments. And here are our reasons why.

Most mobile payments can’t exist without debit and credit cards

Save for a few exceptions such as M-Pesa and VCPay, mobile payments rely on debit and credit cards in order to work. The card may not have to be present for every transaction, but the mobile wallet used to facilitate the mobile payment needs to be paired with a valid card. There’s a way around this, of course, in the form of mobile virtual cards (MVCs) but not all mobile wallets support them.

Mobile payments aren’t universal – yet

Mobile payments have surged, but they haven’t swamped the hold bank cards have on consumers. Reportedly, only 13% of Apple’s 680 million-strong iPhone users has given Apple Pay a go, despite being one of the foremost mobile wallets currently available. By 2020 there will be 22 billion debit, credit and payment cards – that’s three for every person on the planet. Mobile payments have taken off quite well in countries like the US and the UK, but retailers in the rest of the world simply haven’t bought in yet and no one can say for sure when (or if) they will.

Too many wallets, not enough added value

Naturally, there are the big ones: Apple Pay, Android Pay and PayPal. But more mobile wallets keep cropping up. As soon as the advent of the mobile wallet soared, everyone from banks to supermarket franchises scrambled to create their own mobile wallet. The result has been fragmentation that is at odds with consumer experiences. For example, in the US both Wal-Mart and Dunkin’ Donuts have mobile wallets that are useless anywhere else. Visa’s CEO, Alfred F. Kelly, summarises: “My personal view is that there are too many wallets out there. Consumers are not going to ultimately want to have 50 wallets.”

Bank cards don’t have this problem because there are only a handful of well-established issuers, most of whom are widely accepted by retailers.

Bet on plastic

As a retailer, you’re always looking for the best way to process transactions while offering a convenient and pleasant shopping experience to your consumers. Cash and card are the most practical choices in this regard. They are familiar, universal and already staples in consumers’ lives. To set up your business to accept card payments you need to have a point-of-sale system you can trust. With a fixed EFTPOS system you can count on robust functionality and reliability, as well as added value features such as the capability to process contactless transactions. You can also supplement your POS system with a mobile POS (mPOS) card reader such as ZipZap. ZipZap is fast, easy to use, and if you order yours now, you can be taking your business on the move within a few days. To find out more about our EFTPOS products, proceed to the brochure below.

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