Consumers Don’t Use Apple Pay Because Small Businesses Don’t Accept It

by Ben Jackson 0

Forbes columnist Gene Marks says that despite the marketing hype, even people who are tech savvy are not using Apple Pay, Google Wallet, or other mobile payments because the small merchants they visit don’t accept them.

“A report released last week found that 87% of small merchants still do not accept mobile payments. And that number seems kind of low to me, given my experience. If I want to eat out at any one of my favorite restaurants I’m forced to use my credit card, assuming the restaurant even accepts credit cards (because a great many still operate as cash only). If I want to go to a local coffee shop, grab a sandwich at a street vendor, pick up groceries, get a prescription filled, buy some of that ridiculously expensive specialty dog food my wife insists on from the local pet store…even take the subway I need a credit card to pay.”

The conundrum for new payments technology is that it needs to win acceptance both from merchants and shoppers. One of the hurdles is that any new technology needs to solve a problem of provide value that did not exist for the shopper or the merchant before, with the balance tipping towards the shopper. One of the reasons Starbucks has been so successful with its mobile payments is that the application seamlessly integrates its loyalty program and provides automatic top ups for the card. Apple Pay and Google Wallet are working on loyalty programs, and CurrentC promises to deliver discounts, so there may be a tipping point for mobile payments. But for now no one wants to be the one holding up the link trying to get their mobile wallet to work. Besides, they’d rather be texting.

Overview by Ben Jackson, Director, Prepaid Advisory Service at Mercator Advisory Group

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