‘Practical Techie’: Payments are just a swipe away
Author Rafael Matos is professor of multimedia at a private university and director of the Caribbean Multimedia Center, a nonprofit media lab focusing on closing the digital divide. Questions should be sent to [email protected].
Now that our island’s government is bent on developing a vigorous small-business ecosystem in Puerto Rico, it’s prudent to take a look at one strategy that would specially help local micro-enterprises consider merchandise payment options, always a tricky and complicated issue. Quick tech solutions are readily at hand.
We’re talking here of course about mobile payment platforms. A mobile payment occurs when a mobile and Internet-connected device, such as a cell phone, e-wallet or tablet, is used to facilitate a transaction.
As more and more Puerto Ricans lose jobs, retire or shun the salary convention, many move on to create products and services through small commercial venues. In 2012-2013 more than 3,000 small entrepreneurs set up shop on their own, according to Government Development Bank statistics. These small businesses need to develop a viable pay system for customers.
In the real old days, any small store would only need to buy or rent a mechanical cash register and set it up on a counter top near the exit. Then the paying game became complicated with checking, credit and debit cards, forcing even small shop owners to install complex and costly electronic systems connected to banks and other financial institutions, not to mention the credit bureaus.
New technologies now can buck such intricate pay systems of old. A micro enterpriser with a small store front in his marquesina, a professional office in a former bedroom, or a virtual store on the web, can immediately begin to charge customers for wares with a simple swipe of a card on the personal cell phone or a cloud-based pay procedure, such as Paypal, Payweb, Intuit, etc.
Not all is pervasive when entrepreneurial innovation and technology meet necessity. Research by the U.S.-based Institute for Supply Management explains why many businesses are not currently using e-payment systems. Many owners blamed technical barriers, or that E-Systems are not a priority, or they believe that the traditional or cash checking system is adequate. Some had security issues.
Yet, in practical terms, traditional ways of payment are a hassle for small businesses. Banks charge fees for terminals and transactions.
“Traditional card readers are also difficult to set up, and limit sales to locations with a computer or phone line. That’s not an option for nontraditional businesses, like artisans, repairmen, makeup artists, or even groups like local churches or youth organizations,” states Business Insider, a Web intelligencer portal.
What about food trucks, hot-dog carts, pizza boats, or fritter stands and other typical Puerto Rican-style itinerant vendors?
Mobile payments becoming habit
All this goes counter-grain to customer preference, the studies indicate. The habit of paying for things on smartphones and tablets is already becoming ingrained in modern consumer society, particularly among younger consumers.
Clients carry little cash these days, but small businesses often have a hard time accepting them. Mobile card readers allow anyone, anywhere, and at any time to easily process credit and debit card transactions using an item they already use on a daily basis: their smartphone.
Most card-powered e-commerce transactions can take place on tablet or smartphone devices, including iPhone and Android. All a merchant has to do is sign up via the Web, answer a few commercial questions and download a free app to start processing transactions.
Soon a card reader is on the way and credit or debit transactions can be processed without the reader by entering in the credit card number manually on the smart phone. Receipts are texted or emailed. The card reader is encrypted and it is designed not to save customer information on the device. Geolocation is used to accurately calculate the sales tax based on the precise location of each transaction.
The service works 24/7 and from anywhere that the mobile unit has an Internet connection. Costs for the merchant are minimal. The Intuit provider, for example, says it charges “as little as” 1.75 percent per swipe, and it accepts Visa, MasterCard, Discover and American Express.
Intuit also makes security a top priority. Its card reader is encrypted. Sensitive customer data cannot be compromised, because it’s never saved on the device. Business owners can also designate multiple users, allowing them to easily manage all business transactions under one account.
“Whether you’re an artist selling your works from home or a restaurateur with 50 employees, anyone looking to accept credit or debit payments can now do so easily with a mobile card reader,” says Intuit. Already in Asia and Africa, mobile-powered transactions have registered a 118 percent growth.
In other words, tablets and smartphones are powering card-based transactions at physical stores through apps, scannable QR codes, or attachable card readers that transform smartphones and tablets into cash registers. An option worth looking into, for the legion of portable merchants the government wants to empower in Puerto Rico.
