Mobile Payments for Small Business Represent a Big Opportunity for Banks and Credit Unions
In September, Fiserv introduced SpotPay, a mobile payment solution that banks and credit unions can offer to their small business customers and members to accept card payments and deposit checks. Since the launch, SpotPay has received quite a bit of interest for its distribution model that puts financial institutions in the middle of a rapidly growing payments opportunity. David Keenan, general manager of Network Solutions at Fiserv, sat down with The Point to discuss SpotPay, and why financial institutions are best positioned to serve the mobile payments needs of small businesses.
What does the market look like for mobile payments?
Mobile payment adoption is being driven by anyone who needs anytime, anywhere transactions—delivery or taxi drivers, landscapers, hairdressers, retailers at farmer’s markets and other small businesses and merchants.
The market includes the more than 20 million small merchants around the U.S. Cost-effective mobile payment solutions are enabling a secondary market of people who couldn’t previously justify the expense and complexity of accepting card payments—think smaller-volume users, such as babysitters.
This is a competitive market. Why did Fiserv decide to offer this solution?
Smartphone adoption is surging, and technology has evolved to enable every smartphone to accept and initiate payments. We haven't even scratched the surface of what anywhere, anytime commerce means.
The innovation of non-financial institution payment solutions in the market paved the way. But small businesses are looking for a solution from their primary financial provider—banks and credit unions.
With the success of non-FI solutions, we heard from our FI clients that their small business owners were walking into branches asking, “What do you have for me?” Bottom line, we believe small business users will adopt FI-centric mobile payment solutions if the option is available to them.
Why do you think small businesses will choose FI-centric mobile payment solutions over non-FI solutions?
People’s lives are so much more complex than card payments. Let’s go back to the farmer at the market or any small business for that matter. These businesses take payments in more ways than just cards; they also take checks and cash, which banks and credit unions are equipped to handle.
We believe that many small businesses will prefer to use a mobile payments solution offered by their financial institution. It’s where their business and personal financial accounts are already managed. Small businesses trust banks and credit unions, which are regulated institutions, to manage their money securely.
What are the main differentiators between SpotPay and other solutions?
SpotPay is the only available product that is offered through financial institutions. Plus, soon it will feature remote-deposit capture of checks, and for ACCEL/Exchange members, real-time funds availability and account transfers. In the case of a farmer, if you’re selling $10-worth of strawberries, you should be able to be paid in real time, as soon as you provide your customers with the strawberries.
Another innovative feature of SpotPay is that it allows merchants to take a photograph of the customer or the merchandise, and have the photo appear on the receipt which is emailed to the customer after the sale. So, to use the farmer analogy again, the customer could get an email of the receipt with a picture of the basket of strawberries.
Finally, because we have partnered with MagTek for the secure card readers and the application interface, we are able to offer users readers that are durable. I’ve seen heavily-worn cards work on them with the first swipe. This is a distinct advantage over readers that are flimsy and have bad read rates, which diminishes the user experience.
How can a bank or credit union sign up to offer SpotPay?
Banks and credit unions can visit the SpotPay website at http://spotpay.fiserv.com and fill out the sign-up form to get started. In the coming weeks, we’ll also enable small businesses to sign up through the SpotPay website to be enrolled with their existing participating financial institution. If their bank or credit union isn’t a member, the user will be enrolled directly until their financial institution joins SpotPay.