Mobile wallets like Apple Pay and Android Pay have made their way onto consumers' television sets and into large retail stores, but they haven't yet cracked into small business environments, according to new data from the Q1 2016 Wells Fargo Small Business Index.
The vast majority accept cash or checks: 84% of small businesses support these payment instruments, which isn't surprising because cash and checks are the easiest to accept since they don't require investments in point-of-sale (POS) infrastructure.
Also, a slim majority accept cards: 31% accept credit or debit cards at a traditional POS, while another 20% accept cards at a mobile point-of-sale (mPOS). This adds up to 51% of surveyed merchants, assuming there is little-to-no overlap between POS and mPOS acceptance, although there could be.
Mobile wallets are still a drop in the bucket: only 5% of small businesses claimed to accept in-store mobile wallets like Apple Pay and Android Pay. These wallets require newer, NFC-capable terminals that many small businesses still haven't upgraded to. And only 11% of small businesses are actively planning to start accepting wallets in the next 12 months.
However, mobile wallet acceptance among small businesses could rise in 2016. Firstly, mPOS merchants will likely upgrade to NFC-enabled terminals. A huge swath of the 20% of merchants using mPOS devices are likely being pushed to upgrade devices by providers like Square, ShopKeep, Verifone, and more. Therefore, this merchant segment will soon be able to accept NFC-based wallets, which will bring mobile wallets closer to the mainstream.
Also, Samsung Pay could boost both awareness and acceptance: Samsung Pay works on both traditional and newer POS systems. As people start using Samsung Pay, small businesses might become more aware of mobile payments, which could encourage them to start accepting other platforms like Apple Pay.
Both of these factors could drive up mobile wallet acceptance among a huge group of card-accepting small businesses in 2016. This is a crucial step to mobile wallets taking off in the US, because a wider acceptance network could enable consumers to become more familiar with paying on these platforms.
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