Tap to Phone Surge Creates Opportunity for Tap-to-Commerce Expansion

Consumers love to tap and businesses — particularly small businesses — are all in.  That’s the message from Visa, who announced Monday (March 3) that Tap to Phone adoption has surged by 200% year over year across the globe. In the U.S., U.K. and Brazil, rates have surged to a combined 234% growth rate.

“Tap to Phone is a tech equalizer for businesses. Walk into some of the world’s largest retailers or go to your local farmer’s market and they’re using this same technology to accept payments right on their phone,” Mark Nelsen, Global Head of Consumer Products at Visa told Karen Webster in conjunction with the announcement.

The news is notable for its relevance to SMBs. 30% of “tap” sellers are new small businesses, the company said. Nelsen told Webster that for these firms, turning the smartphone into a POS device levels the competitive playing field for small businesses that can mirror the seamless, checkout-in-the-aisles, friction-free payments that are hallmarks of the largest retailers.

The added benefit of not having to invest money in outfitting their operations with new hardware or setting up registers helps formerly online-only SMBs move into the physical, brick-and-mortar realm.

“Think about how those SMBs operate and how they’re able to deliver a different consumer experience,” Nelson emphasized. Think about how they can set up their storefronts in a different way. It is very, very transformative. It’s less about the technology, which is clearly important, and more about the customer experience of walking into that store.”

In short, what Webster calls the “tap to commerce” ecosystem is creating new opportunities for merchants and issuers by following the consumer wherever she is presented with an opportunity to use her card credentials to transact.

Visa made the announcement with a side helping of use cases, illuminating Nelsen’s comment that the technology essentially makes “the world your storefront” for businesses of any size.

This flexibility has proven particularly valuable for businesses with unique operational challenges. For example, owner Ariel Davis of the Brooklyn Teacup told Webster in a separate interview that Tap to Phone has enabled her to bring commerce into her studio in a manner that could not have been done previously. Hers is an upcycling business and studio in that borough that, among other wares, repurposes china into everything from accessories to décor to three-tiered serving trays. 

“If people liked something, they were buying it off my eCommerce site,” she said, paying through platforms such as Shopify or after getting invoices sent via e-mail.  Now, she’s turned the ever-present phone into a POS terminal — a marked improvement over other hardware.  “When you have china cups scattered everywhere, a point of sale dongle is going to lost in two seconds.”  The Tap to Phone experience, modern as it is, may “feel unexpected in this kind of space,” said Davis, “but people are really impressed.”

“I think it’s true enthusiasm,” Nelsen said. “You know, like usually people don’t get that excited about payments, but when you talk to people like Ariel at Brooklyn Teacup, this truly did transform how her business operates. She used to only do eCommerce and then she’s like, ‘wait, I can actually create this amazing experience.’ So I think it’s just the excitement around it. You don’t usually hear about that with payments.”

There’s reason for issuers to be excited as well. Beyond Tap to Phone, Visa’s  “tap to commerce” ecosystem includes Tap to Add Card, which allows users to add eligible credit or debit cards to their digital wallet by tapping the card to the back of their phone. Since launching globally with Apple Pay in September 2024, this feature has enabled millions of tokens for more than 100 issuers, according to Nelsen, creating a “top of wallet” experience for issuing banks.

“The 100 issuers that we have now, that should grow into thousands over the next couple of years,” Nelsen predicted. He also noted that the streamlined card provisioning process in the tap ecosystem eliminates the need for customers to manually enter card details, resulting in higher authorization rates and reduced fraud. “Just think of how much better that is than having to go and retrieve a one-time passcode and go enter that in. It’s just such a better experience for everyone,” Nelsen said.

Visa is continuing to develop additional tap capabilities that will further enhance its ecosystem. These include Tap to Confirm, which allows consumers to quickly authenticate high-value transfers, and Tap to Send and Request money, which enables users to tap physical cards or credentials to a friend’s phone to securely transfer funds. Tap to Send will be available later this year on Samsung Galaxy devices as “Tap to Transfer.”

For acquiring banks and payment facilitators like Square, Tap to Phone represents an evolution of their business model. “So many of the players are on Square and Square used to have the dongle that they would ship out, but this is just so much easier,” Nelsen said. Similar solutions are being deployed by regional payment facilitators globally, creating a consistent experience for merchants regardless of geography.

In summary, Nelsen says Visa’s portfolio of interrelated “tap to” solutions spanning payment acceptance, credential management, and fund transfers will give the company a comprehensive platform that serves both sides of the payment transaction.

For small businesses in particular, these technologies “let a thousand flowers bloom,” Nelsen said, enabling entrepreneurship and innovation at a scale that wasn’t previously possible without significant investment.

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