Gone are the days of customers reaching into their back pockets for cash or cards.
“Innovations like mobile tap and mobile wallets can simplify and simplify the customer payment experience,” said Julie Malikayil, senior manager, payment products at Discover® Global Network, told PYMNTS, noted that these payment innovations provide businesses, especially small and medium-sized businesses (SMBs), with flexibility, cost-effectiveness and improved customer experiences.
However, according to Malikayil, it is essential to first understand the distinction between mobile tapping and mobile wallets.
“Tap on Mobile is the ability to accept payments via a mobile device without the need for additional attachments or peripherals,” she says. This allows merchants to seamlessly transact from their smartphones or tablets. On the other hand, mobile wallets allow customers to make payments directly from their mobile devices, creating a quick and easy way to complete purchases.
These innovations not only streamline the payment process, but also expand options for merchants.
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Contactless payments: a game-changer for small businesses
Traditional point-of-sale (POS) systems have long been a cornerstone for accepting payments in physical stores. However, they come with limitations. “A traditional cash register system is stationary and takes up a lot of space,” says Malikayil. This limits how and where payments can be made.
On the other hand, tap mobile payment solutions to unbundle merchants from a single point of payment. This industry-leading technology extends across industries from restaurants to delivery services, giving merchants more flexibility to meet their customers where they are – and it’s especially useful for small businesses that may not have the resources to invest in high-tech and to maintain these. hardware infrastructure.
“Food trucks, mom-and-pop shops and individual merchants can easily download an app and start accepting payments,” said Malikayil. “The barrier to entry is super low.”
These merchants are no longer limited by bulky POS systems and can focus on providing an optimal customer experience while taking advantage of the streamlined payment process.
Malikayil added that the adoption of contactless payments has increased dramatically in recent years, with contactless transactions growing by more than 50% year on year – and that the use of mobile technology is outpacing overall contactless growth.
“We see high-end retailers using this technology to provide personalized payment experiences, such as letting customers pay while trying on clothes or jewelry,” she says.
Read more: Discover Global Network looks at customer shifts to define innovation
Meeting customer needs through personalized payment experiences
A key benefit of mobile payment solutions is the ability to integrate personalized experiences, such as loyalty program benefits or personalized product recommendations, into the checkout process. For example, if a customer regularly purchases a particular product, a company can offer targeted discounts or suggest additional items, improving the overall shopping experience.
“Engaging customers in an end-to-end experience – from visiting a store to trying [out the product]to checkout – keeps them coming back,” said Malikayil.
Another major benefit is the shift from cash-based transactions to card-based transactions, which is more secure and efficient for both consumers and businesses. “Reducing cash handling is a win for everyone involved,” said Malikayil. This shift is especially important for small businesses, with 92% of merchants expecting tap on mobile to deliver value to their organizations within the next three years, according to research commissioned by Discover Global Network.
From a customer perspective, contactless solutions offer several important benefits. First and foremost, they provide convenience. “Mobile payments can take place almost anywhere, as long as there is a mobile network or Wi-Fi,” said Malikayil.
This flexibility means that customers can pay for goods or services whether they are standing at a store counter or sitting at a table in a restaurant. In busy environments, such as during peak hours in a cafe, mobile payments help speed up the checkout process, reduce wait times and improve overall customer satisfaction.
Looking ahead, Malikayil predicts that contactless payment solutions will continue to evolve, bringing even more benefits to both merchants and consumers, especially as innovations such as smart checkout systems and the continued shift to cloud-based transaction processing continue to evolve.
“Smart POS terminals are beginning to merge payment functionalities with inventory management, loyalty programs and personalization,” says Malikayil, noting that these software-based solutions provide businesses with a way to integrate multiple functions into one mobile device, further simplifying business operations and the customer experience.
Another trend she highlighted is the shift to cloud-based transaction processing, known as “kernel in the cloud.” By moving transaction processing from physical hardware to the cloud, companies can reduce certification overhead, improve maintenance, and accelerate the rollout of new payment solutions.
And as these technologies mature, so will security standards. “The PCI Security Council has already developed new security standards to support mobile solutions,” said Malikayil, underscoring the industry’s commitment to maintaining security while enabling innovation.
