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The Impact of Mobile Payment Technology on Small Business

The Impact of Mobile Payment Technology on Small Business

Technology has been fueling the innovation of the financial industry for quite some time now. First alternative lenders like OnDeck, CAN Capital and Kabbage entered the scene with new underwriting systems that made it easier than ever for small businesses owners to receive access to working capital. Now Apple and Wal-Mart have stepped into the playing field with mobile payment processors, how will these impact consumers?

In October, Apple launched Apple Pay. Marketed as an easier way to pay in stores, or as “your wallet, without the wallet” Apple Pay aims to make your phone your primary method of payment in stores, and online. Essentially, they have created a contactless payment technology so that you can use any of your apple devices to pay for goods, securely. What’s more, is that Apple made partnerships with the big banks to keep Apple Pay transactions at a low price for merchants, even lower than it costs them to process credit cards. In essence, Apple hopes to take over the whole payment processor world by giving people a more secure way to pay for their products or services, limiting the potential for data breaches from hackers.

For smaller, community banks, this could be a big problem. The more people stray away from traditional forms of payment and go towards newer technology, the more small businesses and banks will be left in the dust, as made evident by the fact that the only companies to jump on the mobile payment bandwagon are big business! Smaller businesses do not have the time or resources to test the success of mobile pay like the big guys (Wal-Mart, Target, etc.) do. This gives small business a competitive disadvantage against big business, once again.

What do you think; will mobile payments prove to be just another catalyst for consumer spending or will it have a drastic impact on the state of small business?

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