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Tap to Mobile Is the Solution for Rising Demand of Contactless Payments

As the payments ecosystem evolves, it’s becoming more challenging for small businesses and micro-merchants to remain competitive and retain market share. Many of these businesses are cash-only or may be unable to afford feature-rich payment terminals that accept contactless payments, however tap to mobile: a technology solution that turns smartphones into payment acceptance devices, could be the solution.

NMI, the payment enabler, has published its research on the rise of mobile payments, surveying 300 small business owners and 1,000 consumers in the US and UK to get a snapshot of the market. Although tap to mobile is still in the early adoption stages, it’s progressing fast. Some highlights from NMI’s research show that small businesses believe:

It is a viable solution

  • 95% of SMB owners said they would consider using tap to mobile payment technology, including 92% of current cash-only businesses. Additionally, 83% of consumers said they would likely use tap to mobile payments if it were offered by a business.
  • The top factors that would influence SMB owners’ decisions to offer tap to mobile payments for their businesses were:
    • Cost (i.e., cost of the technology, maintenance, etc.): 66%
    • Customer demand: 55%
    • Security (i.e., the security of business and customer transaction data): 54%

Contactless payments are a necessity for consumer

  • Although 93% of SMB owner respondents agreed that customers are looking for more contactless payment methods when making a purchase at their business, many still aren’t delivering, especially in the US.
  • Over a third of US SMB owners (34%) said they don’t offer contactless payments, compared to only 9% of UK SMB owners.
  • When asked why SMBs are unable to accept contactless payments, the majority of owners (55%) said they simply haven’t upgraded their systems to accept contactless payments. And even though customers are seeking more contactless payment methods when they shop, 37% of SMB owners that don’t accept contactless payments said they don’t see the need to offer them.

Cash-only or not, small businesses share the same pain points

  • Just over a quarter (26%) of SMB owner respondents said they were cash-only.
  • The non-cash-only group used money transfer apps (70%), mobile card readers (69%) and standalone terminals (52%) to process in-person payments for their businesses.
  • Both groups were concerned about transaction fees and hardware costs.
  • When asked what would convince them to move away from using their mobile card reader system to a new system for processing mobile payments, SMBs with mobile card readers said the top factors were less expensive hardware (49%) and less expensive transaction fees (47%). Comparatively, when asked why they are a cash-only business, over half of the cash-only SMB respondents (52%) said they don’t want to pay expensive transaction fees for credit card purchases and more than a third (36%) also cited expensive payment systems hardware and equipment.

Why tap to mobile technology is the solution

Jeremy Gumbley, CSO and CIO at NMI
Jeremy Gumbley, CSO and CIO at NMI

The Fintech Times sat down with Jeremy Gumbley, CSO and CIO at NMI. When asked what shocked him the most, he quoted the findings: “‘95% of SMB owners surveyed said they would consider using tap to mobile payment technology, including 92% of cash-only businesses.’

“‘Additionally, the vast majority of consumer respondents (83%) said they would be likely to use tap to mobile payment if it were offered by a business. And 85% said they would be more likely to shop at a business that offers tap to mobile as a payment option.’ We were surprised at how much both businesses and consumers alike want tap to mobile (TTM) technology. We knew that contactless capabilities were going to be a popular choice, but we were surprised at the sheer level of demand from both parties – especially since TTM is a relatively new technology.

“This goes to show that the convenience of contactless coupled with the lack of additional hardware provides a hugely compelling user experience for merchants and consumers alike. Merchants will love this technology as they can use an NFC-enabled Android phone that they are already familiar with; they don’t need to learn how to use something new. Consumers will love this technology because card payments can be offered by traditionally cash-only businesses with the speed, convenience and health benefits of contactless.”

Gumbley went on to analyse the general mood to contactless payments in both countries saying, “Launched in 2010, contactless is a well-established and commonly used technology in the UK. It’s fast and convenient, and once consumers are aware of the technology, they prefer it over dipping their card. Its introduction into the London Underground in 2014 accelerated its use in the UK. While the pandemic accelerated usage globally, many US consumers are still unfamiliar with the technology since it was introduced much later. Contactless technology arrived in the US in 2014, but card issuers only started to issue contactless cards in earnest in 2018. We expect this to change in the coming years, especially as TTM technology becomes more widespread.”

He concluded by explaining the similar pain points and what paytechs could do to elevate SMBs of them, “The whole concept of TTM, which is to remove any additional hardware such that is needed to take a payment, will prove very attractive to a large segment of merchants. In turn, this will make TTM an obvious and compelling addition to any vendor’s technology stack. The fact that there will be no additional cost or complexity introduced by additional hardware will enable merchants who have previously steered clear of accepting electronic payments due to cost to finally accept them.”


  • Francis is a journalist and our lead LatAm correspondent, with a BA in Classical Civilization, he has a specialist interest in North and South America.

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