Guest Column | January 8, 2014

SMB Payments Balancing Act: Leveraging Cutting-Edge Technology Without Getting Cut

By Mitchell Cobrin, CEO, AnywhereCommerce

SMBs and individual entrepreneurs usually possess the agility and flexibility to adopt emerging technologies and trends that can help give them a competitive edge. The excitement that comes with early adoption — and keeping ahead of sometimes larger competitors with more dominant brand presences and more expansive marketing budgets — is, however, not without risk. With proper planning and execution, establishing this lead can bear significant fruit. For the reseller focused on the SMB market, this thirst for staying one step ahead of the pack can represent an opportunity to forge an ongoing customer relationship that can continue to bear fruit as new technologies and trends enter the market.

In the payment acceptance arena, the adoption of mobile payment technologies — those, for example, that allow the merchant to go to the consumer, whether in the aisle, in a temporary location such as a sidewalk sale or festival, or at the consumers’ home or place of business — seems to be growing by leaps and bounds. Unfortunately, as is often the case with explosive growth, negotiating the range of different technologies being touted as the ideal choice for mobile point of sale (mPOS) can be challenging for the merchant — who is always more interested in doing business than becoming a technologist. Among these new — and sometimes not so new — approaches are EMV, NFS, QR code or token-based systems, traditional magnetic stripe, and electronic imaging. And further muddying the waters are alternative currency concepts, such as Bitcoins, electronic person-to-person payments, and others.

For the VAR seeking to quench the thirst for competitive mobile commerce solutions, it is wise to consider flexibility as the watchword. Open platforms and endpoints that can easily integrate different and even new ways of conducting commerce will not only keep merchants doing business, but will also provide ample opportunity to quickly and cost-effectively move over to the next wave of innovation.

Consider EMV (chip card) adoption in the U.S., as an example. We have been hearing about it for a long time, but the rate of practical adoption has proven sluggish. The VAR that can provide an economical solution today, with the ability for the merchant to implement EMV tomorrow, when the time is right, and to do so quickly and easily — and without the expense of re-terminalization or wholesale upgrades —is the kind of adoption strategy that would appeal to a broad range of SMBs.

In the case of NFC (near field communication), again, open platforms that can adopt this technology when it meets the real demands of consumers, and when it delivers tangible value to merchants, will represent the best pathways to immediate and long-term success for both the VAR and the merchant. As a technology, NFC offers great potential. It combines the power of the smartphone with intelligent apps that deliver added convenience to the consumer and a host of marketing and data-mining opportunities for the merchant. The reality has not quite caught up with the hype for mobile wallets and NFC-based commerce, but it is gaining momentum, and the tipping point for both consumers and merchants could be just around the corner. The best advice for those in any market is to be ready to adopt when it makes the best business sense.

While Bitcoin appears to be an Internet phenomenon that bypasses the traditional banking and commerce process, it can generate significant appeal among younger consumers, and others that are probably more attuned to breaking away from traditional centralized infrastructure. Enabling person-to-person and person-to-business exchange of payment can be very appealing for a variety of reasons, but the use of this unregulated exchange paradigm is not without risk. The same was probably said for using a smartphone as a POS terminal just a few short years ago. As such, it would be wise for VARs to keep a finger on the pulse of alternative currency and exchange methods, and be prepared to advise businesses about the risks and rewards of adoption when there is a good fit for a particular opportunity or marketplace.

For many SMBs, smart adoption of technologies can continue to enable aggressive competition, but as the whirlwind of new technology in the payments acceptance and m-commerce space continues to kick up dust, a reseller’s advice to interested businesses should be made clear: keep a watchful eye on the next new thing, plan for adoption when the moment is right, and assure that any solution be built upon open and flexible platforms. These are the critical elements of success to any long-term m-commerce adoption strategy. Such a measured approach will keep SMBs on the cutting-edge of innovation — without getting cut.