Mobile payments are getting bigger and bigger; following the trend that mobile is the new top channel for conversions. More than 52% of all ad impressions, registrations and purchases are made on mobile devices now, surpassing desktop for the first time in 2009. But how does the higher conversion translate to mobile chip & PIN payments, are they really a viable lasting solution, or simply a spin-off of the new popularity of mobile?
The mobile point of sale industry is dominated by two major players; payleven in Europe and Square in the U.S.A. There are many differences between both solutions; from the pricing structure to the method of payment- for example Square, in line with American card security guidelines, only offers swipe and sign, whereas payleven offers a more secure and Europe wide recognized Chip & PIN solution. In general, those that use mobile services to take cards are small business owners, freelancers and sole traders. Larger retail establishments generally use traditional card payments systems as they can front the expensive costs. The amount of people that use mobile card payments solutions are growing, and the technology has quite a foothold in Europe. This is mainly because card payments are becoming more common in general; so the customer expects the convenience of card payments, and small businesses lose out on a lot of business by only accepting cash.
The technology behind mPOS is similar to that of a traditional card reader, however instead of communicating with merchant bank accounts via phone lines, mobile chip & PIN communicates via SIM card (GPRS/GSM data networks). Therefore to take a mobile payment you must be connected to the internet, preferably on a secure connection, and you must have access to Bluetooth on your phone. That is the other interesting part of mobile payments; usually, if they are being processed in-app they involve pairing of devices through Bluetooth technology. In this way, the app acts as the register where the merchant inserts the amount to be paid, and the chip & PIN device acts as, well, a chip & PIN device.
In this capacity mobile payments are more than simply a passing fad; they are built upon complex technologies that have lasting value for the industry. As often is with new technologies, advances come about fast, meaning that these methods may be outdated within the next two months. However, there is always the flipside that the companies in the mobile space are adaptive and flexible, so new solutions can be found to ensure market share. The main question of the longevity of mPOS services comes from the side of the merchants and customers, but as this is so changeable it is near impossible to predict. The only sure thing is that card payments and mobile usage is on the rise, so taking those two facts together it seems there will be an upwards curve for the probability of mPOS use continuing.