Are UK Merchants Really Attracted By Mobile POS?

Square and PayPal Boxes

Mobile POS systems have taken off with small business owners in North America for a little while now. Their coverage may not exactly be widespread in comparison to POS devices, but the various brands associated with accepting cards for small to medium businesses is healthy.

Many brands are now expanding out into new regions with PayPal taking their Here device to Japan and then Square following a couple of months after. Many MPOS devices are spreading out across parts of Asia as Singapore seems to be adopting the technology.

Other nations are embracing mobile payments instead, or NFC terminals, but those aren't necessarily ideal for smaller businesses.

In the UK the adoption of NFC has been high and generally welcome – even if Marks & Spencer customers have had their confidence shaken – but the prevalence of MPOS devices for small businesses still seems thin on the ground.

One example can be found just outside our London offices.

An entire street full of wonderful food stalls that sell a whole manner of amazing delicacies from around the world. Some of them have made so much money from their stalls they've managed to purchase property down the road to transfer their business into.

However, many of these stalls still don't accept card, even some of the bricks and mortar sellers cannot take card payments.

Clearly this is an opportune time for MPOS devices to be rolled out for use, after all most workers and stall owners have smartphones on them, they would be perfect ways for people to pay.

So, what's the problem, why aren't people adopting the technology and instead favouring cash over card?

Well, despite the reasonably low fees on each card payment, many of these stalls would feel that the cost doesn't outweigh the benefits. They've got a raft of loyal customers who come to their stall for their excellent food. These people know that they don't take card payments and so will come prepared with cash.

There's also a free cashpoint not too far from the street – with a paid cashpoint being on the same street. Most people who have decided what they want won't be deterred by the effort to withdraw cash to get their food.

While it would certainly be handier for their customers if they took card, and quite possibly boost their sales as more customers may come and pay on card, it's unlikely that they feel such a need to invest in the technology – especially as card payments take time to verify and thus would slow down the rate of queues they have to deal with.

It also brings to question just how well informed merchants are with this new payments technology and how effective payment providers have been in conveying the benefits of the service.

While I'm sure it's rolled out in many places across the UK, I have never come into contact with such a device for payment – especially when they're rather recognisable.

What do you think about the adoption rates of mobile payment systems in the UK?

Do you believe that more small business owners should be adopting them to make life easier for the customer?

Let us know by leaving a comment below or interacting with us on Twitter or LinkedIn.

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  1. Gerry O'Doherty

    It needs to be a win win for merchant and customer. If a merchant has a steady stream of customers willing to pay cash then why bother implementing any kind of electronic commerce which will only delay the transaction?

    If I was a merchant I’d need to be convinced the increase in sales would justify the MSC and transaction time. The lower the former and faster the latter the easier it will be to get merchants to the tipping point of MPOS.

  2. Parama Raj

    There could be a delayed uptake of this technology but having looked at the technology I just wonder how reliable a 3.5mm jack would be and how it will stand up to the rigours of continuous usage. Once it starts failing or being unreliable the merchant will stop using it and the consumer as pointed out wants the service and will tolerate the inconvenience. Thus in my opinion as it begins to kick-in, the drop off will be larger.

  3. Mark Scott

    I’m not sure whether MPOS would benefit the customers of these stallholders in the short term. These micro-businesses use cash because there are no additional overheads to it. Accepting cards will add to the overheads of their businesses and that will in turn be reflected in the prices they charge (or margin they deliver).

    To start offering alternative payment methods they would need to be pretty certain that the increased sales they might see from offering them outweighed any sales they might lose through increasing prices (or reducing their margin).

    Of course, there will come a point where these guys will start accepting cards/mobile. Cash is practically free to use at the moment, but as less people use it banks will feel more at liberty to impose charges on those that do – then there’ll be more parity between payment solutions and cards/mobile etc will take off.

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