Accepting payments with a smartphone rather than a traditional card machine is still a relatively new concept – but new research shows that an uptake in the UK is slower than expected.
The first mobile point-of-sale (MPOS) tools arrived in the UK around 18 months ago, but it seems that only 2% of micro-businesses in the UK are using the technology.
Awareness of the concept is growing, with half of the companies surveyed aware of MPOS technology, according to Kalixa – the firm behind the study.
Essentially, MPOS technology enables a business to accept a card payment using a smartphone instead of the traditional fixed-point-of-sale terminal.
Reasons for the slow uptake
The issue of time taken to accept these payments was identified by one in ten companies as being a reason for the slow uptake of the new technology.
Systems currently take between seven and ten days on average to process the payments, slowing cash flows for businesses that are looking to expand quickly.
Security was identified as a problem by more than half of those surveyed, while nearly 30% said they had experienced connection issues with the MPOS devices.
For rapid growth, adapting new payment procedures was seen as important by half of the companies surveyed, with 38% saying they would adapt the practice if their concerns were dealt with.
The need for developed payment options
“Micro-businesses are missing sales and face delayed settlements, with many citing current payment technology as the culprit and mobile as part of the solution, said Colin Swain, head of product, innovation and insight at Kalixa.
“Yet market adoption simply isn’t there.”
Alternative payment options are seen as being a key driver to business expansion and customers are increasingly looking to use methods far beyond simply paying with debit or credit cards.
While it may still be several years before mobile payment technologies really develop in the UK, it is already being identified as a key area in the way payments are managed.
Prepaid card options
For anyone looking to manage their finances in a different way, a prepaid card could be an option for them when it comes to payments.
Only the specific funds on the card can be spent, meaning it is impossible to run up debt due to the fact that a credit facility is not available.
However, the cards can still be topped up when necessary and can be used in a similar fashion as credit or debit cards for paying for goods and services.
Security measures such as chip and PIN exist on some cards and they are not directly linked to a bank account, so the risk of fraud is also reduced.