Despite recent moves into mobile payment by giants such as Bank of America and Visa, US merchants may be hesitant to adopt the new technology, according to analysts at Reuters.
First, there’s the issue of cost. According to Reuters, merchants pay banks nearly $50 billion a year for processing transactions on credit or debit cards, including contactless or mobile transactions. More transactions means increased processing fees, and coupled with the cost of upgrading hardware, which normally only occurs every 5 years, merchants may be left with a bill too large to foot.
According to Red Gillen, senior analyst with consulting firm Celent, merchants are going to need a big incentive before committing to contactless mobile payment now, otherwise they’re just going to wait and see.
These incentives could come in the form of reduced processing fees or services such as more customer data, according to Reuters.
First adopters of the technology are most likely to be technology-savvy companies that cater to young customers with large networks, such as Starbucks, Target and the Apple Store, says Reuters.
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