Why People Are Not Using Mobile Wallets

Do you use Apple Pay, Google Wallet, Paypal or some other new startup mobile wallet? No, I didn’t think so. No one seems to be using their smartphones to pay for stuff. Well, almost no one. We don’t want to carry around credit cards, or even our wallets, right? But we still have to. With all of the hubris and excitement over mobile payments I rarely see anyone buying things at stores and restaurants with their mobile devices. Family, friends and work colleagues all own iPhones or Android smartphones. There not afraid to download Apple Pay or Google Wallet or another mobile payment service and get it configured. And yet, they are still overwhelmingly using credit cards or cash like they have always been doing. (According to Gene Marks article in Forbes)

Why? Small merchants aren’t getting on board. But why don’t small merchants accept Mobile Payment Apps? That’s easy. Just follow the money.

Because it is expensive and we are not just talking about the fees the merchant processing cost them to accept credit cards but they need to purchase or upgrade to a point of sale devices that accept the service. They need to make sure the device is integrated with their current systems. They need to train their employees (and re-train new employees where turnover is significant) how the process works. And if they’re going to offer mobile payments, they’ll likely have to go all-in and get themselves setup for Google Wallet, PayPal and others. This is disruptive for many low-margin retailers and restauranteurs, and super-disruptive for smaller merchants who don’t have the time to deal with a headache that’s not on their list of the top 100 headaches of the day. Particularly so when many of these business owners already hate credit cards to begin with.

Small merchants hate the 2%+ fees charged by credit card companies, plus charges for statements and cost to purchase equipment. It has an enormous impact on their profits. And now there’s mobile payments? This is not profitable. A customer rewards program, like the one Apple is reportedly planning isn’t the answer. The customers don’t need help. Merchants need help. There are no incentives, lower fees, discounts or reimbursements to the small merchant for doing this. Just more costs. So, 87% (according to Forbes) of them just aren’t doing it. It’s a money loser and smart business owners know it. And until the rest of the mobile payments industry accepts this fact and ponies up some cash, most small merchants will only be accepting credit cards or cash for the foreseeable future.

Is there is a solution?

Yes it was created by Nudipay a start-up based in Australia with plans to launch in the USA, UK, and Canada in 2015. The idea came to Les Toft from all the fees that his co-founder Raff Velardo in the hospitality industry complained about. What makes Nudipay different? Their mobile wallet will have it's own eco system and instead of you having to find an ATM, carry all your credit and debit card, always have cash on you, you will just be able to carry the cash right on your phone. But what really makes Nudipay stand out is that the merchant, all merchants will pay just 15¢ a transaction regardless of the size of the transaction. On top of that the small merchants do not have to purchase any equipment, they can use it on their laptop, computer, smart phone, tablet, etc.. No need to buy anything.

Nudipay will allow merchants to have a system for payments that does not eat into the bottom line. Customers will have a new way to pay a merchant without carrying all their credit cards or trying to find an ATM to get cash out. Just think you'll be able to finally go to your favourite small business and have a convenient way to pay that is a win win for you and your favourite small business. There will many other great pluses to the Nudipay systems, but the one that matters the most is the barest of cost to the merchant and acceptance at all your favourite small businesses. This is what the small and medium enterprises have been waiting for.