Mobile Payments Growing Faster Among Small, Distributed Businesses

The issue with mobile payments adoption always is the ability to align clear value propositions for several key constituencies, simultaneously. So far, the clearest example of that alignment is small business (or distributed retail units of enterprises) use of mobile credit card readers.

Square's mobile payments volume, for example,  rose to $10 billion in 2012, up from $2 billion in 2011. 

The point is that mobile card readers have solved the adoption conundrum by immediately aligning consumer, retailer, bank and processor interests. 

Consumers don't need new phones; they keep using their existing debit and credit cards. But small retailers get a low-cost way to accept credit and debit card payments even at non-traditional locations. 

The value to retailers is more "time to processed payment" than "lower payment processing fees," though. 

In fact, the value of mobile card readers is the ability to accept card payments at non-traditional locations, for small merchants to take such payments for the first time, or to reduce the float time between transaction and receipt of funds. 

That value can outweigh even the alternate value of "lower transaction fees" that can be another driver for adoption of mobile payments by retailers. 

For card-issuing institutions, processes don't change, but transaction volume grows. And transaction clearing is unaffected. 

The point is that a clear value proposition has to exist, and that value has to be significant for at least one of the key segments of the payments ecosystem, to succeed. One might argue that value for retailers is what has made mobile card readers so successful, so fast.