Survey: Small Businesses Still Not Sold on Apple Pay

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Small Business

There’s no shortage of hype around mobile payments. Since the release of Apple Pay, pundits have claimed that your smartphone will soon replace your wallet. But a recent survey of small business owners suggests that credit cards are not going away anytime soon. Why? Because Main Street has yet to embrace the promise of mobile payments.

This presents a huge problem for mobile payments vendors. While retail giants may be adopting the technology, I believe it will not become mainstream until the more than 25 million small businesses on Main Street adopt it.  Based on the 572 responses to a survey of businesses on Alignable, a small business network, business owners still do not fully understand the technology, see tangible benefits for adopting it, and feel real demand from their customers.

Many SMBs are confused about mobile payments
The study reveals the extent to which small business owners are confused about the new ways to process payments. About a third of respondents said their customers are actively asking to pay by phone, but based on the comments in the poll we suspect that small business owners were confusing paying with a mobile phone, like Apple Pay, with mobile credit card processing options, like Square and GoPayment. Typical of a number of comments was this one from the owner of a construction company: “We accept major credit cards via mobile payments, Square, PayPal etc.”

This type of confusion makes it clear that mobile payment providers aren’t doing a great job of educating business owners about the technologies available to them. It doesn’t take a “genius” to know that just giving away Apple pay decals to merchants isn’t going to eliminate the confusion. Robin Edwards, from Food4Thought in San Diego, advised another respondent looking for information on the technology that “Apple Pay seems to be best known for consumers – you might consider checking with Apple to see how to get set up.” Shouldn’t it be the other way around?

Main Streets still don’t see the “why” in mobile payments
More education would likely increase the number of early-adopter small businesses to accept mobile payments, but Apple and others still need to demonstrate the value for business owners. While 14% cited a reduction in transaction fees as a compelling reason to adopt the technology, softer benefits often touted by mobile payments providers failed to impress small business owners polled. Three percent or less of respondents cited benefits such as such as easier integration with loyalty programs and faster transaction times as compelling reasons to start accepting mobile payments.

Small business owners are highly tuned into the needs and wants of their customers, so it was not surprising that the top trigger for mobile payments adoption–cited by 27% of respondents–was “my customers ask for it.” But paying with your phone just isn’t prevalent enough yet for most small businesses to invest in it.

As Jorga Houy, of LA Sports Acupuncture, put it, “I‘ve been in business since 2006, and have been using Square since 2011. Not once has anyone ever asked if they could pay by phone.”

Clearly, adoption of mobile payments among SMBs will come only after consumer demand ramps up. If vendors want SMBs to help drive consumer demand by offering the technology, they should be reaching out to small businesses, educating them on their technology, and doing a much better job selling them on how it will benefit their businesses. From the looks of it, it’s going to be an uphill battle.

EricGrovesHeadshotEric Groves is the co-founder and CEO of Alignable, the small business network where local businesses and organizations connect and collaborate with others nearby. Eric has been a local marketing expert and enthusiast since joining Constant Contact as a founding executive in 2001.