Gone are the days of customers fumbling in their back pockets for cash or cards.
“Innovations like tap on mobile and mobile wallets go a long way to simplify and ease the payment experience for the customer,” Julie Malikayil, senior manager, payments products at Discover® Global Network, told PYMNTS, noting these payment innovations offer firms, particularly small and medium-sized businesses (SMBs), flexibility, cost-effectiveness and enhanced customer experiences.
However, according to Malikayil, it’s essential to first understand the distinctions between tap on mobile and mobile wallets.
“Tap on Mobile is the ability to accept payments via a mobile device without needing additional attachments or peripherals,” she said. This allows merchants to conduct transactions seamlessly from their smartphones or tablets. On the other hand, mobile wallets enable customers to make payments directly from their mobile devices, creating a quick and convenient way to complete purchases.
These innovations not only streamline the payment process but also expand opportunities for merchants.
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Traditional point of sale (POS) systems have long been a cornerstone for accepting payments at brick-and-mortar stores. However, they come with limitations. “A traditional POS is stationary and takes up a lot of space,” said Malikayil. This restricts how and where payments can be made.
By contrast, tap on mobile payment solutions untether merchants from a single checkout spot. This leading-edge technology extends across industries, from restaurants to delivery services, providing merchants with greater flexibility to meet their customers where they are — and it is especially useful for small businesses that may not have the resources to invest into and maintain high-tech hardware infrastructure.
“Food trucks, mom-and-pop shops and individual vendors can simply download an app and start accepting payments,” Malikayil said. “The barrier to entry is super low.”
No longer constrained by bulky POS systems, these merchants can focus on providing an optimal customer experience while benefiting from the streamlined payment process.
Malikayil added that adoption of contactless payments has skyrocketed in recent years, with contactless transactions growing by over 50% year over year — and tap on mobile technology is outpacing general contactless growth.
“We’re seeing high-end retailers use this technology to offer personalized checkout experiences, such as letting customers pay while trying on clothing or jewelry,” she said.
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One key advantage of mobile payment solutions is the ability to integrate personalized experiences, such as loyalty program benefits or personalized product recommendations, into the checkout process. For instance, if a customer frequently buys a certain product, a business can offer targeted discounts or suggest complementary items, enhancing the overall shopping experience.
“Keeping customers engaged in an end-to-end experience — from visiting a store, trying [out the product], to checking out — keeps them coming back,” Malikayil said.
Another major benefit is the shift from cash-based transactions to card-present transactions, which is safer and more efficient for both consumers and businesses. “Less handling of cash is a win for everyone involved,” Malikayil said. This shift is especially important for small businesses, with 92% of merchants anticipating that tap on mobile will provide value to their organizations within the next three years, according to Discover Global Network’s commissioned research.
From a customer perspective, contactless solutions offer several key benefits. First and foremost, they provide convenience. “Mobile payments can happen nearly anywhere as long as there’s a mobile network or Wi-Fi,” Malikayil noted.
This flexibility means customers can pay for goods or services whether they’re standing at a retail counter or sitting at a restaurant table. In busy environments, such as during peak hours at a café, mobile payments help speed up the checkout process, reducing wait times and improving overall customer satisfaction.
Looking ahead, Malikayil predicts that contactless payment solutions will continue to evolve, bringing even more benefits to both merchants and consumers, especially as innovations such as smart POS systems and the ongoing shift to cloud-based transaction processing continue to mature.
“Smart POS terminals are starting to merge payment functionalities with inventory management, loyalty programs, and personalization,” Malikayil said, noting that these software-based solutions offer businesses a way to integrate multiple functions into a single mobile device, further simplifying operations and improving the customer experience.
Another trend she highlighted is the shift to cloud-based transaction processing, known as “kernel in the cloud.” By moving transaction processing off physical hardware and into the cloud, businesses can reduce certification overhead, improve maintenance and speed up the rollout of new payment solutions.
And as these technologies mature, so will security standards. “The PCI Security Council has already developed new security standards to support tap on mobile solutions,” said Malikayil, underscoring the industry’s commitment to maintaining security while enabling innovation.
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