Do Mobile Payment Systems Work in a Blackout?

The widespread, long-term power outages wrought by Hurricane Sandy may have caused merchants nationwide to wonder: Do mobile-payment systems continue to function when there’s no electricity?

Electricity vs. Mobile Phone Service

It’s important to remember that the infrastructures that support electric utilities and mobile phone communications are separate from each other. Electricity is transported to users via power lines and cables above and below ground, while cellular signals travel through the air and hard-wired telephony networks.

Because it has miles and miles of connecting wires and cables, the electrical grid is more susceptible to inclement weather than the cellular network infrastructure, and electricity service can be interrupted by a single disconnected wire, a broken transformer, or an inoperative power substation. With mobile phones, all that is necessary for them to function is a working cell tower that is connected to a cellular substation — which requires of a much smaller number of cables and wires than the electricity grid. Of course, there’s no guarantee that mobile phone service will remain uninterrupted in a storm. When Sandy rolled through New York City, AT&T and Verizon customers in Manhattan reported cellular-service outages because the mobile phone masts apparently had been toppled or damaged.

Mobile-Payment Ramifications

All you need to process mobile payments is a working mobile device, such as a smartphone or tablet. As long as its battery is charged, you can do business as usual without electricity. Once the device’s battery is drained, the device cannot process mobile payments until it is recharged, which can be done with the aid of a portable generator (that might also power lights and/or heat in your store).

Many businesses obtain a mobile payments account even if they don’t use the system on a daily basis as a backup. Because they are only assessed charges when a transaction is processed and do not incur monthly fees if the system goes unused, merchants commonly view mobile payments as a backup transaction-processing system in case of a blackout. Not only can they keep their businesses up and running during power outages, but they can take in revenue when their competitors are unable to do so. Talk about a competitive advantage!

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