Since the middle of 2021, there’s been a continuing shortage of semiconductor chips, which are a key component of mobile phones, computers, televisions, and last but not least, point-of-sale (POS) terminals. This shortage has caused a disruption in the payments processing industry and many merchants are having a tough time getting their hands on traditional POS devices.
Like other fintech companies, we’ve experienced a shortage of terminals that require semiconductor chips for operation, including the Dejavoo Z9 WiFi terminal which is available in wireless; the Clover Station Duo LTE which is available with WiFi; and the ever-popular Clover Mini. We’re also dealing with the restricted availability of the PAX A line.
A New World of Payments
While this worldwide shortage may be inconvenient, it’s opening up the door for the widespread adoption of tap-to-mobile technology. Tap-to-mobile transactions are made possible by a short-range wireless communication network that transmits data from your debit or credit card to a merchant’s mobile phone. These payments are similar to tap-to-pay transactions, but instead of requiring a POS terminal, it just requires the merchant to download an app on their smartphone.
The technology behind both tap-to-mobile and tap-to-pay payments has been around for decades, but it’s just now picking up steam due to the semiconductor chip shortage, as well as the hygiene concerns of the COVID-19 pandemic. Let’s discuss why this move toward widespread adoption is beneficial for both merchants and consumers.
- Major Savings: Approximately 85 percent of Americans own a smartphone so, for most business owners, the cost to start accepting tap-to-mobile payments is $0. The cost of purchasing a payment terminal is often a barrier of entry for entrepreneurs just starting out, so this eliminates that barrier.
- Preference for Contactless: A study from Visa found that 63 percent of consumers say they would switch to a new business that installed contactless payment options. Especially among the younger generations, there’s a clear preference for this type of payment.
- Safer Method: Contactless payments utilize one-time codes to send encrypted financial information to merchants. In many cases, completing a tap-to-mobile or tap-to-pay transaction is more secure than a regular chip or stripe payment.
- Easy Setup: As opposed to using a traditional payment terminal, opting to utilize tap-to-mobile technology requires very little setup. All you need to do is download the appropriate app, input your details, and start accepting payments.
Learn More
Are you interested in offering tap-to-mobile and tap-to-pay options to your customers? Contact us to learn more about these two payment methods that are changing the payments landscape for the better.
