New embeddable technologies and connectivity has enabled everything from contactless payments to using PayPal to buy a T-shirt or coffee. But without buying and deploying a new system for each one, how do you stay on top of them all?
The idea that the customer is always right is an old adage, but it’s never been truer than when it comes to new payment methods.
Our compatible smartphones and tablets are the endpoints for a rich new universe of payment choices for customers. An e-commmerce can be an all-digital sales platform that you can use both in-store and online to handle transactions and help keep records across every sales channel.
Many new systems rely on near-field communications (NFC), a communications protocol that lets compatible electronic devices in close proximity exchange information. Instead of having a magnetic stripe or chip, newer-style debit or credit cards can be held a few centimetres from the payment device, rather than being swiped.
The applications for SMBs are the ‘tap and pay’ systems you’ve seen or maybe used, and they don’t cost a lot more than an older style POS terminal (a (a Paypal Here terminal is $149 from OfficeWorks, for example.
But when the information is transmitted to the POS machine, it can connect with a universe of other networks like bank accounts, card numbers and reporting that can make it easier for customers and ultimately give you more control.
Smart waiter
Tablets and screens to order and pay are getting popular in many restaurants and cafés, the obvious advantage being that they save manhours when staff no longer has to ferry bills and payment cards across the floor for every customer.
Stanley Martone of Connecticut-based Castello Pizza says using tablets has given him an edge over nearby competition. “We’re able to accommodate customers from any part of the restaurant from the main dining room or the patio, and we also use them for managers to easily monitor employee shifts, sales reports and inventory from anywhere with an internet connection.”
Of course, in Australia we’re famous for being early adopters both as consumers and small business operators, so you’re likely to find cafes and shops in your local area who offer similarly tech-savvy payment methods.
If you can’t afford a whole fleet of iPads for your premises, systems like TableSafe Rail let staff deliver a small screen device encased in the bill folder. The customer can pay using their credit card or Paypal and keep account numbers and details completely private.
Robert Frost of Emory’s Bar & Bistro in Everett, north of Seattle, says RAIL has made servers more efficient because they can turn tables over faster.
“It’s made our bookkeeping process much easier,” he adds, “we’ve been able to reduce our paper costs since receipts can be emailed using the device. We wanted to be out in front of the chip card technology and ensure we had an elegant way to accept this form of payment.”
Although he says there’s been a slight learning curve for older customers who aren’t digital natives, Emory’s enjoys peace of mind knowing the customer’s credit card information is secure.
For smaller or mobile businesses, providers like Squareup have been popular for a few years – you’ve probably seen the little magstripe reader you plug into a smartphone (although the recent flap over the iPhone 7’s lack of a earphones port will force a lot of providers like Squareup to evolve further).
Hands off
Contactless payments took off when providers like Visa, American Express and Mastercard launched their own systems. They assured us the security was industry-leading standards because of the encryption and authentication technology, and it provides the means for customers to transact anonymously because the cardholder’s name isn’t recorded. In fact, unlike magnetic stripe cards, the means of payment never leaves their possession.
But such ease of use can be reverse engineered. With no manual step like inputting a PIN or signing, an appropriately equipped hacker can hold an NFC reader close to a card and perform an unnoticed payment.
The wallet or purse, online
Closely related to contactless payments are the digital wallets offered by the likes of Apple and Google. They’re just like the accounts you hold to buy music in iTunes or apps in Google Play, except the apps let customers pay using NFC technology on a smartphone.
Combined with geo-location data, digital wallet services can be effective marketing tools, letting you issue discounts or other inducements to shop while your customers are in store or passing by.
The big players will have us believe their systems are safe, and if you use a fingerprint or PIN authentication with Apple Pay that may be – but you’re effectively enforcing magnetic stripe era security measures, which deems to defeat the purpose somewhat.
But NFC stills transmits data that can be intercepted. The gateways that separate customers’ card numbers and financial information from the software and servers are complex and as most security providers warn all big businesses it’s a matter of when – not if – big companies get hacked.
Plus, if you lose your phone without realising, someone has your account at their disposal. And as several high profile hacks including the 2014 leaks of celebrity nudes prove, no system is perfect.
Tomorrow’s digital money
The big promise of cryptocurrencies like Bitcoin is that they’re managed through a peer-enabled system called the blockchain without the need for vulnerable third parties like bank or credit card companies to validate transactions.
Unfortunately that means that however much techies love cryptocurrencies, the rest of us have been slow to adopt them. If any customers do want to use it you’ll save money because it’s much cheaper than credit card merchant fees.
But they’re extremely volatile against real currency. Between February and May 2010 one Bitcoin was worth less than USD$0.01, and in January 14 it had reached $US1,000 (it’s currently around US$600).
New pitfalls
Step one when adopting any new payment technology is to make sure you understand the fee structure fully. None of the providers mentioned are non-profits, and they’re only too happy to bamboozle you with complicated systems to hide real costs.
In order to spend the least amount of money, time and training needed to deploy new payment gateways, find a consolidated system that can handle most of the new style payments you’ll receive.
An informal poll of customers about the payment methods they’d like to use might be quite enlightening. We’re used to buying online using Paypal, for example, many people would consider it a natural progression to use it in the offline world.
Giving them the ability to do so might be your first step into a whole new world.