Cash Flow Solutions

Why Your Business Needs to Change the Way You Accept Payments Today + Tips on Apple Pay & Passbook [WEBINAR RECAP]

Baristas watch as customer completes payment on tablet

Thanks to everyone who was able to attend our webinar this week on mobile payments, Apple Pay and Passbook, featuring speakers from LevelUp and Capital One Spark. If you missed the webinar, you can view the video playback on our Kabbage Kam Webinars YouTube Channel and view the slides on our SlideShare. Both the slides and video are also embedded at the bottom of this article for you as well.

The way businesses accept payments from customers continues to rapidly change as technology shifts, new startups launch, and big companies like Google, Apple, PayPal, Capital One, and more release payment solutions. Just as small businesses were expected to adopt credit cards in addition to cash transactions years ago, the switch from credit cards to mobile wallets or clunky desktop credit card machines to mobile credit card readers is continuing to change the face of cash flow for businesses.

Mobile payment credit card readers that fit on a smartphone such as Spark Pay, PayPal Here and Square are relatively new additions to the payments landscape in the last couple years. These types of mobile payment technologies have completely changed POS systems for small businesses. Now, we’re seeing more new payment solutions introduced such as Google Wallet, Passbook, and Apple Pay, which Apple announced just a month ago. These types of mobile payment solutions allow consumers to remove their wallet from the payment equation by paying through email or by storing mobile versions of credit cards.

Since a lot of these large companies have the ability to drive user adoption (especially well-followed tech companies like Google and Apple), small business owners should expect these new payment technologies to be adopted even quicker than the cash vs. credit cards switch. We know that keeping up on all the new payment solutions and card reader companies can be overwhelming and difficult to understand when and what your business should adopt. So we invited two guest speakers from financial technology companies to tell you their take on the market shifts.

To start off, we welcomed Dave Talach, Head of New Ventures for National Small Business at Capital One as our first speaker. Dave covered some of Capital One’s research on mobile payment adoption, how it can help businesses. He also talked about some of the technology behind mobile card readers – such as Capital One’s Spark Pay.

Dave shared a recent survey Capital One did that showed businesses who have shifted to mobile payments have seen positive impact on their business:

mobile payments for small business

An important point that Dave made were that mobile payments make processes easier for business owners because a lot of them integrate other solutions into the mobile payments process such as inventory management and financial tracking. Capital One’s survey found that businesses that accept mobile payments see improvement in the way they manage their business:

capital one spark business mobile payments

In addition, according to Capital One’s survey, 69% of small business owners found it easy to make the shift to mobile payments and 1 in 4 businesses who start to use mobile payments do so to replace their POS system, which allows them to free up valuable retail space.

When making a decision on what mobile payments solution to choose, Dave talked about the four most important things you should look at, which are:

  1. Cost: It’s important to know what your fees are associated with the solution, whether that’s monthly or per swipe rate, and if there are any additional fees.
  2. Obligation: You should know if there is a contract or commitment you have to adhere to if you sign up.
  3. Security: Make sure to understand what security is offered by the company as they utilize your customer’s data. They should encrypt the data at the time of the swipe and not storing it to the phone.
  4. Support: Look into what kind of support the mobile payments solution offers. How do they deal with chargebacks? Can you call someone to help resolve your issue?

Next we welcomed Christina Dorobek, VP of Partner Development at LevelUp who kicked off her presentation with talking about how Apple Pay was announced on stage this quarter, and how businesses can make the shift from plastic to mobile and utilize technology like Apple Pay and Passbook.

Christina used two analogies to introduce these two new technologies. Apple Pay is similar to a credit card. Customers paying with Apple Pay use the NFC (near field communication) technology on the phone that allows them to tap to pay at businesses that offer this technology. Passbook (also offered on iPhones) is similar to a wallet. Any iPhone with iOS 7 or 8 stores your digital credit cards, loyalty cards, boarding passes, tickets, and more.

apple pay vs. passbook

Christina covered four main points in her presentation. These were:

  1. Accepting payments using Apple Pay is identical to accepting credit cards. The only difference is there’s a tap to pay instead of swiping a credit card. The only thing that could be negative about this switch is that the credit card rates to use Apple Pay could go up, and a prediction is that it might cost more per tap than a credit card swipe. So, you’ll want to pay attention to this when making the switch.
  2. Apple does not have customer transaction data for purchases made with Apple Pay, and neither will you. You’re not gaining any information from using Apple Pay.
  3. You’re not gaining any control over the quality of interaction with your brand by using Apple Pay. It’s the same as if a customer swipes their credit card, and you’re not going to have any increased interaction with your brand.

After these three major points, Christina closed with the following statement:

Accepting payments through Apple Pay is no different than accepting payments with a credit card, and business owners can own the shift in these payment technologies and get ahead of the curve.

Finally, Christina covered some of the interesting ways in which brands can leverage mobile technology to drive customers and increase sales. For examples, 16 percent of Starbucks customers paying through their app, which allows mobile payments, and Starbucks integrates their gift cards with Passbook as well. This is a great example of a brand that’s using mobile payments in a really intelligent way. Christina suggests some of the following:

  • Using gift card technology that allows your gift cards to be uploaded to phones in Passbook, instead of offering paper punch cards
  • Use mobile payment surveys – after a customer comes in, you can ask them how their experience was through rating systems offered by some mobile payment card readers
  • Allow your customers to order through an app or mobile website
  • Use beacon technology that allows you to reach out to customers when they are nearby and send them a welcome message or coupon
  • Use LevelUp to create mobile campaigns that drive more traffic such as the ‘Make It Rain’ campaign in Boston. Boston businesses see a 20% decline in business when it’s raining, so LevelUp allows you to send a coupon to come in when it’s raining and save money and LevelUp’s customers have seen the dip in business decrease from 20% to 10%

We hope all of the detailed information Dave and Christina provided about mobile payments has helped you with a least a few tips you can take away to rethink the way your business accepts payments from your customers today. To learn more about our feature companies, visit LevelUp or Capital One Small Business.

Did we miss answering something that you were looking for in this webinar? Let us know in the comments, on Twitter: @KabbageInc, or email us at Sign-up for our free small business newsletter to get access to more webinars and marketing tips by entering your email in the form at the top of the sidebar of this blog.

Thanks for listening in! We hope to see you next time!



Want to dig deeper?