Category: Mobile Payments

mPOS technology is now being adopted in a collaboration that is occurring between banks an tech vendors.

As a part of a greater effort to try to boost card based transactions and to encourage financial inclusion, banks in Mexico are now working with vendors providing mobile payments technology in order to be able to roll out mPOS solutions at small business locations.

This type of initiative is being encouraged by the Mexican government in order to boost cashless transactions.

In Mexico, current statistics show that about 70 percent of all purchases in the country are being made in cash. Moreover, cash and the informal economy is making up about 30 percent of that country’s GDP. Sixty four percent of the 1 million grocery stores in Mexico are small businesses that are typically family owned. This helps to illustrate the importance that businesses of that size have on the Mexican economy, and the difference they could make in the adoption of mobile payments technology.

The success of mobile payments in the country are greatly dependent on the adoption by mom-and-pop stores.

According to the country manager for Visa Mexico, Luz Adriana Ramirez Chavez, “Mom-and-pop stores play a major part in Mexico’s retail economy, yet they lack the tools to compete effectively with larger retailers.” Ramirez Chavez went on to say that “By installing mPOS devices offering retail management software, they can have more control and grow their business. Also, when they start accepting cards, they benefit from higher sales tickets.”

In November, last year, Tableta Concanaco was launched. This is a program that is meant to provide SMEs and micro-businesses with mPOS technology. It was a combined effort between the Sistema de Administración Tributaria (SAT/Tax Administration system), the Mexican tax authority, and the Confederación de Cámaras Nacionales de Comercio, Servicios y Turismo (Concanaco – Servytur/Confederation of National Chambers of Commerce, Services and Tourism).

Beyond a subsidized tablet with a mobile payments point of sale subsidized software built in that provides electronic invoicing and inventory management, each of the business owners that participate in the program are also given a Visa debit card into which the card transactions from customers will be deposited.

Among the primary barriers to paying via smartphone has been a concern that it is not secure.

Although mobile payments are becoming increasingly popular among smartphone and tablet users, they are still not increasing in use at the rate that many in the industry had predicted, despite its broad availability.

Among the main concerns that consumers have expressed is in the form of worries over its security.

That said, Zapp, a mobile payments provider, has now released a report that says that using smartphones to complete purchase transactions is actually safer than buying something over an e-commerce website. Within the report, the company explained that people using this type of service can better “…carry out secure transactions…” than would be possible if they were shopping at the typical online commerce website.

Zapp feels that mobile payments can allow a consumer to shop with the same security as they would with other transactions.

According to David Emsworth, a spokesperson for Zapp, the smartphone based payments ecosystem is undergoing an evolution that should make it possible for a consumer to use a mobile wallet with the same confidence in its safety and security as they would have when using any other transaction platform.

That said, Emsworth does admit that among the reasons that mobile wallets have not yet faced the types of usage popularity that would draw as much attention to them from hackers as has been created by credit cards. As there aren’t that many users, there aren’t as many criminals out there who are targeting the method.

Potential thieves aren’t yet spending the type of time and effort on cracking mobile wallet systems and platforms as they are on systems that have a considerably larger usage base. That said, as this type of transaction becomes increasingly mainstream, it is unavoidable that those thieves will start to place more of a focus on those smartphone based platforms.

Therefore, while Zapp may be right in saying that mobile payments are currently actually a safer method of shopping than submitting a credit card number into an e-commerce checkout system, it is unknown as to whether or not that will remain the case as consumers start to use these digital wallets on a larger scale.