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Friday, September 27, 2013

Low Satisfaction Could Hinder Growth for Mobile Payment Processing

By Beth Youra

This post is part of Gallup's ongoing series on the shifting landscape for financial institutions. It provides insights into channel optimization, emerging customer behaviors and preferences, product penetration and relationship growth, engaging the most critical affluent and business customers, and reshaping banks' overall value proposition.

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Like a lot of people, my first encounter with mobile payment processing took place in an Apple store a few years ago. The store was busy, and it was amazingly convenient to not have to go jockey for a position at one of the few cash registers. At the time I remember thinking, “This is great and so easy, why don’t more companies do this?”  

Fast forward to 2013 and mobile payment processing hasn’t grown as quickly as I once thought it might. According to this year’s Gallup Business Banking Industry study, 24% of small businesses (defined as those with revenue under $2 million per year) and 26% of medium-to-large businesses (revenue over $2 million per year) use mobile payment processing, a service that automates payment transactions via a mobile device.


After my visit to the Apple store, it took another year before I encountered mobile payment technology again, this time a waitress at a restaurant processed my credit card using a similar device at my table. “It’s so customers feel safer and know that we aren’t taking their credit card away from them, swiping it, and stealing their information by creating a copy of their card,” the waitress explained. Then earlier this year, the family-owned deli in our office building switched to a mobile payment processing system. They said their bank-provided merchant services were getting too expensive and they were not easy to work with.

As a consumer, I still don’t encounter this technology very often, but when I do, the businesses that use it are growing increasingly excited by its possibilities. Recently, when I was at a flea market in the middle of a rural area, I bought homemade candles from a woman who made them in her laundry room as a hobby using my Visa card and a Square Reader on her Android phone. When I asked her why she bothered with the Reader when she sold mainly in an environment where people expect to pay with cash, she stated that she didn’t want to be the person you came to when you had already run out of cash -- she was trying to maximize her sales. 

The benefits of mobile payment processing -- convenience and cost savings -- have continued to drive businesses to adapt this technology. However, increasing adaptation moving forward could be more challenging due to one large issue: low customer satisfaction. Our Business Banking Industry survey also found that just 41% of businesses are extremely satisfied with the service they receive from their mobile payment processing system. And of the 17 financial services products we asked businesses about, mobile payment services were one with which respondents were the least satisfied.


To drive businesses to adapt mobile payment processing more quickly and increase satisfaction, providers need to focus on making their systems easy to use and cost effective. Given the low satisfaction ratings, they should also implement strong customer tracking programs. Providers must be able to discern where customer satisfaction issues are coming from -- technology, product features, pricing, or customer support -- then implement programs to fix the issues and track progress of customer perceptions of the fixes over time.

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