Mobile stands to revolutionize point of sale

In many ways, mobile technologies have already changed the way merchants and consumers alike look at electronic payments. Though credit, debit and prepaid options such as ACH cards were once the only choices for making cashless transactions, advanced applications for smartphones and tablets have joined the fray with measurable success. Experts believe that this trend will continue in the coming years, further changing the way point-of-sale (POS) operations work.

Shoppers gung-ho about changes in payment methods
In two surveys of more than 6,000 consumers, Javelin Strategy & Research noted that while mobile POS proximity payments only represented 0.01 percent of all retail POS payments in the United States in 2012, they are poised for significant growth. The firm estimated that these transactions will total $5.4 billion in 2018 due to merchants' efforts to popularize their use.

Overall, retail POS transactions totaled $3.98 trillion in 2012 alone, and this number is expected to increase to $4.2 trillion in 2018, research suggested.

"The retail POS market is evolving at a remarkable rate with the increased popularity of the ecommerce and mobile payments markets," said Aleia Van Dyke, industry analyst at Javelin. "Today's consumers are demanding more digitized payment options to enhance their in-store shopping experience. The advanced features of non-traditional payment options like mobile and prepaid cards have encouraged adoption with today's tech-savvy shoppers."

Additionally, Javelin's studies attested to the importance of merchants supporting a wide range of electronic payments technologies. Not only will ACH cards and similar prepaid tools be used more frequently than traditional gift cards by 2015, but Gen Y consumers seem to be eschewing cash altogether. The research firm noted that debit cards are this demographic's preferred method at POS locations.

But what about security?
While Javelin's research suggests that mobile payments and other virtual methods are continuing to take hold as viable options for many shoppers, one of the lingering issues for many customers and store owners is trust. Even though adoption is ramping up, there are still worries that using programs such as retailer-specific payment apps and digital wallets could be risky. Perhaps the most common area of concern is that hacking could lead to the compromise of financial records, which may in turn translate into consumer credit report damage if fraudulent lines of credit are taken out.

According to Mobile Commerce Daily columnist Angella Emmett, hesitation due to the questioning of mobile payments' security may be misplaced in many cases - she contended that while there are certainly scenarios that can occur and are dangerous to consumers, they are often preventable. This means that consumers and merchants should not avoid these new transaction methods entirely, but rather embrace them in a way that is safe.

For the average shopper, this may mean researching apps before using them and opting to enable built-in safety features such as PINs and passwords, while also avoiding storing financial data on their gadgets. Retailers should additionally make sure security measures are being undertaken on their end, that they work with vetted service providers and that they establish a knowledge of payments industry compliance guidelines and adhere to them.

Emmett explained that the benefits of mobile payments to all parties are too great to ignore due to worries over highly avoidable mistakes. These advanced POS transactions tools help them enjoy a more personalized experience, complete with opportunities for more comprehensive research, task management, inventory visibility and more. By streamlining the shopping experience, mobile payments mean more consumers get exactly what they want and need out of their interactions with vendors, and merchants are more easily able to serve their clientele not only through more thorough intelligence on their buying habits.