Phone Instead of Your Credit Card To Buy Something? Listen-up Small Businesses?

Hold on to your small business hats, things are moving even faster.   Google Inc. Chief Executive Eric Schmidt said Monday that the smart phone will eventually replace the credit card.   This may come as a surprise to you, but Bill Gates predicted that and a lot more over 15 years ago in his book, The Road Ahead.  This advent of technology will have a lot of challenges to small business.  Some of the issues are things like, will a business have to pay any credit card fees for the transaction?  Obviously there shouldn’t be one of the merchant charges, because the phone may not be using the small business merchant’s number. What about security?  If someone uses a stolen phone, can they access the owner’s bank account to purchase small business merchandise?  Will the small business retain the same security as a credit card transaction?

The small and medium sized businesses should be looking at these developments closely, but not just compliance issues.  This type of new technology could give a small and medium sized business a competitive advantage over their rivals.  How?  Let’s assume that these transactions will not impact the small business as much as a credit card transaction.  That translates into a savings to the small business, and maybe the consumer.

Or, what about a small business advertising that they accept I-pad credit purchases?  That service can bring customers into their establishment.  Small and medium sized businesses can process their purchases without high-interest charging credit cards.

Small businesses must look at as many technological advancements as possible and ask the question, “How can this technology create a marketplace where the competition becomes irrelevant?”  The small businesses that jumped on the first ATM machines created an edge for a short time.  Now, you don’t need them.