Welcome to another in our One on One series of conversations with some of the most thought-provoking entrepreneurs, authors and experts in business today. Trevor Dryer, head of Product Management, Mobile Payments and Point-of-Sale at Intuit, spoke with Brent Leary in this interview, which has been edited for publication. To hear audio of the full interview, page down to the loudspeaker icon at the end of the post.
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Small Business Trends: In the U.S. alone, a report from Report Linker said that m-commerce is about to grow tenfold between 2010 and 2014. The number of mobile Internet users in the U.S. alone is going to reach 100 million this year–one in three people.
Just how big is mobile commerce today, and how big do you see it growing in the near future?
Trevor Dryer: Mobile commerce is just getting started. Smartphone adoption is going through the roof. Not only is m-commerce going to be a huge market, but at some point more people will be transacting on a [mobile device] than on their home computer.
At Intuit good numbers of our customers are now coming to us solely through the mobile device. In the past, they would start out with a Web-based application and desktop products, then use the mobile device as a supplement. Now we see folks interacting with our products solely through mobile.
Small Business Trends: Do you see a lot of small businesses participating in mobile commerce?
Trevor Dryer: It is still in its infancy, particularly in the face-to-face payments point of sale (POS) world.
Our user base is growing very, very rapidly. Our GoPayment users—GoPayment is our mobile face-to-face POS product–are up 800 percent since December. Still, if you look at the total number of users, it’s fairly small. A lot of small businesses aren’t aware they can turn their smartphone or tablet into a mobile POS device to accept credit cards.
Small Business Trends: How long until being able to transact business with mobile devices becomes a need-to-have, instead of a nice-to-have?
Trevor Dryer: I view it the same way as a business taking credit cards right now. We still run into some businesses that only take cash, but they lose a lot of sales. The same thing is going to be true with payments on a mobile device. Right now it is a big competitive advantage; within the next year or two, it will become a critical part of small business strategy.
Small Business Trends: How has the combination of smartphones and social media impacted the need to take mobile commerce seriously?
Trevor Dryer: Yelp is a good example. Recommendations can make or break a business, and businesses. That is only going to accelerate with new apps that leverage the Facebook social graph to let people make more personalized, targeted recommendations to friends.
[Combined with social media], the special capabilities of a mobile device, such as geolocation and NFC [near field communications], allow small businesses to interact in a much richer way with their customers.
Small Business Trends: What is NFC and how does it differ from bar code scanning technology used in most phones?
Trevor Dryer: NFC is device-to-device communication. I believe Google Nexus S phones are the first in the U.S. to have these chips. Google will be rolling that out into a lot of different Android devices, and there is speculation that Apple is going to include that in their devices as well.
The NFC chip allows two devices to quickly talk together when they are in close proximity. For instance, Google recently demoed an end-to-end payment where one phone has an electronic prepaid debit card on it and the other phone is running our GoPayment application, which allows merchants to quickly ring up sales and take payments. All you have to do is touch the phones together–tap and pay—and the transaction is securely and quickly completed.
NFC allows you to do other things with the data transfer. For example, if the consumer had authorized this in their settings, they could, when the phones are tapped together, not only pay but automatically be enrolled in that merchants’ loyalty program and have an electronic loyalty card on their phone. NFC can also provide enhanced security to verify that the user of the phone is authorized to use it. It can provide on-the-spot coupons. It gives a lot of additional functionality you can’t get from scanning a bar code or handing over a credit card.
Small Business Trends: What has to take place for everybody to access NFC?
Trevor Dryer: The first problem is getting the chips in enough devices, which I think will happen in the near future. Then the big challenge is consumer adoption. Consumer adoption needs to come before small business or merchant adoption – consumers need to want to use their phones to pay for something. That will get small businesses to see the value in adopting this new technology.
For consumers to adopt it, it has to provide value greater than they currently get from their physical wallet and credit cards. Payment is pretty quick with the NFC, but not a lot faster than handing somebody your credit card. That’s where value-added services will come in. Imagine a world where somebody has on their phone a list of all of their credit cards, debit cards, the amount of money in their bank account, and their budget in different categories. When they tap their phone to pay for a new item, they can see exactly how it fits into their budget. Those types of value-added services will drive consumer adoption, which will in turn drive small business and merchant adoption.
In Japan and Europe a lot of folks are already using NFC to pay vending machines, transit systems, even tap their phones to gain access to a building.
Small Business Trends: What should a small business trying to create the best mobile commerce experience for their customers be aware of?
Trevor Dryer: First, think about how they are going to use mobile commerce to attract new customers and think about their strategy for social media reviews.
Second, know there are partners out there that can help. Finding a good partner means they have a solution that will incorporate new technology to help them meet their business objectives.
Small Business Trends: Where can readers go to learn more about mobile payments and NFC?
Trevor Dryer: Go to our GoPayment Blog. Search for Google IO or NFC, and a video we created about NFC should pop up.