POS tablets outshine mobile wallets, ShopKeep finds

In a survey of 1,794 small business owners, ShopKeep found a slight increase in mobile wallet adoption over a two-year period. In a report titled ShopKeep Small Business Pulse: 2018, ShopKeep evaluated responses from a diversified base of U.S. retail and hospitality customers. Among merchants polled, 50 percent had one to three employees, and 57 percent were female business owners, which survey researchers called "a positive sign considering that women's self-employment rate has historically been lower than men's."

This year's findings are at odds with the company's 2016 report in which 42 percent of respondents expected half of all transactions soon to be mobile payment schemes. Despite the 2016 forecast, mobile payment activity remained flat among 68 percent of merchants surveyed, with 24 percent seeing only a modest lift. Even merchants with mobile payment capabilities said they are hesitant to activate the services, according to survey data. Michael DeSimone, chief executive officer at ShopKeep, attributed this hesitation to marketplace uncertainties.

"There is still a lot of confusion in the marketplace when it comes to digital wallets and mobile payments. In the ShopKeep Small Business Pulse, 43 percent of small business owners stated that they don't even offer mobile wallet options to their customers," DeSimone noted. "With 25,000 small businesses on our platform, we know many of these customers actually are equipped to accept mobile payments, so we believe that improving education, as well as adding incentives like tying mobile payments to a loyalty program, could be something we see more of in the future to drive further adoption of the technology."

Sandy Travers, co-founder and co-CEO at DigiPay Solutions Inc., recommends removing barriers to entry, such as a requirement for personally identifiable information and lack of universal apps. "Mobile wallets need to be device-agnostic, and many mobile wallet schemes require users to input Social Security numbers during the registration process," Travers stated. "Until we remove these barriers, we'll see increased mobile wallet usage in select verticals, but not on a broad, national scale."

More actions, less noise

DeSimone additionally noted that mobile payments are not top of mind among small and midsize merchants, many of whom are struggling to maintain profitability. In an environment with an 82 percent failure rate, survey data highlights the need for effective planning and cash flow management, he noted. Following are additional recommendations.

• Focus on profitability: Data analytics and business insights, included in most POS tablet solutions, can help merchants manage cash flows.

• Manage growth: Researchers found only 23 percent of small business owners were thinking about opening additional locations. The majority of respondents were focused on profitability, with 88 percent prioritizing increasing sales, 32 percent on improving market performance and 28.93 percent on improving the in-store customer experience.

• Implement ecommerce: The survey found brick-and-mortar businesses that opened online stores increased revenues by an average of 28 percent. "We assume that despite the advantages of transitioning online, the operational logistics associated with ecommerce discourage small business owners from diversifying their online presence with a digital storefront," researchers wrote.

Editorial Note:

Whether you want to upgrade your POS offerings, find a payment gateway partner, bone up on fintech regs or PCI requirements, find an upcoming trade show, read about faster payments, or discover the latest innovations in merchant acquiring, The Green Sheet is the resource for you. Since 1983, we've helped empower and connect payments professionals, starting with the merchant level salespeople who bring tailored payment acceptance and digital commerce tools, along with a host of other business services to merchants across the globe. The Green Sheet Inc. is also a proud affiliate of Bankcard Life, a premier community that provides industry-leading training and resources for payment professionals.

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