What you’ll spend

Offering a mobile wallet means you’ll be spending money. You’ll need an app, hardware, and a payment-processing solution if you decide to accept mobile payments–which Tweedt recommends, as many shoppers look for stores that support Apple Pay. Startups like LoopPay, Wallaby, and Yoyo let companies set up a mobile-wallet platform. Building a white-label app on a service like Revel can cost a flat fee of $1,000, plus monthly charges. Payment terminals–where mobile-wallet customers can tap their phone to complete their purchases–can run from $150 to $300 each.

Alex Shuck, director of marketing and analytics for LevelUp, advises small businesses with 10 to 100 locations to budget at least $20,000 to develop a custom app with the basic suite of features. Businesses with more than 100 locations, he says, may want to set aside “at least the cost of opening a new store into their mobile property as an initial investment–and half that again each year moving forward.” That’s why some merchants go with a simple white-label solution, or even just a loyalty program and forgo a wallet entirely. But larger merchants and those seeking a custom experience may find that additional features, like nutritional information for restaurants, are worth it. And keep payment-processing fees in mind. Amitaabh Malhotra, chief marketing officer for OmnyPay, a digital-commerce platform, says retailers using third-party wallets like Apple Pay are at the mercy of processing fees for each purchase–typically 2 to 3 percent for credit cards and less than 1 percent for debit cards. (Apple Pay charges 15 basis points to the card issuer per transaction.) With your own wallet, you can dictate what payment types you’ll accept.

All that said, mobile payments in the U.S. experienced a slight dip last year. Transaction volumes are higher outside the U.S., Tweedt says. So you may be wary of investing in a technology that isn’t mainstream­–or dealing with the headaches of training and testing. Adoption of mobile-wallet technology “is still pretty small” among small businesses, says Nicole Perrin, an analyst for eMarketer.

Given those factors, rather than follow in the footsteps of large retailers, which build their own custom apps, Tweedt advises launching your service on a well-known wallet like Apple Pay, Android Pay, or Samsung Pay. Apple Pay in particular is worth focusing on, he says, given its torrid growth rates.

“Merchants would be wise to adopt mobile wallets now,” Tweedt says, so they don’t miss out on an expected spike in usage once Apple Pay starts advertising directly to consumers, slated to happen near the end of 2018. If wallets make sense for your business and customer base, they’re a great way to connect to your consumers–but, as ever, there’s no substitute for a killer product or experience.