In today’s smartphone-driven world, mobile payments are an increasingly viable method of conducting transactions. And it’s easy to understand why: they’re quick, convenient, and secure. Despite their growing popularity, many people are still unfamiliar with mobile payments and most businesses still do not have the means to accept them. As they continue to become a more prevalent payment method, it is important for merchants to understand what exactly mobile payments are, how they work, and why their businesses should start accepting them.
In the most basic sense, a mobile payment is a transaction that is enabled through a mobile device. Mobile payments can be used in a peer-to-peer situation (i.e. paying back a friend) or to purchase items from an actual business. To carry out a mobile payment, a mobile wallet app is required. A mobile wallet app allows you to store your credit card information securely on your smartphone and use that information to make a mobile payment. Apple Pay and Samsung Pay are probably the most recognizable of these apps, but there are many others on the market.The technology behind most mobile payments is known as NFC (near field communications) technology. NFC allows two enabled devices to communicate contactlessly. So, whenever you wave your smartphone over a mobile payments reader at a store, that transaction is powered by NFC technology. There are other uses for this tech, but it is in the payments industry that it has been most valuable.
As a business owner, you should be paying close attention to the constant changes in the business world in order to stay relevant and competitive. With mobile payments being one of the newest and fastest growing innovations, it is important to understand the benefits of accepting them. For one, they boost profitability by providing customers the most convenient payment method available. This profit boost comes from creating a level of customer value based on ease of payment. And this makes sense; cash-only businesses generate less profit than their card-accepting counterparts. It’s possible that, in the future, this will be the case with businesses that accept mobile payments and those that don’t.In addition to providing an easy and convenient payment method, business owners should also enable mobile payments because they offer greater security than existing payment options. This is partly due to the method of tokenization that many mobile payment technologies employ. Tokenization basically masks the data on the card, which helps prevent cardholder data from being exposed. Providing the most secure payment method available will help to put the customer’s mind at ease and establish a level of trust. Although there are security measures in place to protect cardholder data, there a few risks associated with mobile payments, just as there are with card payments. However, these are easily preventable and the security benefits greatly outweigh the risks.
Mobile payments are a relatively new form of payment and therefore require some special equipment to enable the transaction. Many business owners fear that accepting mobile wallet payments will require big changes to their existing systems, but this simply isn’t true. In fact, most modern card terminals come already equipped with the NFC technology required to accept mobile payments. If you’re just hoping to accept mobile payments in-store, there’s no need to go out and get a fancy reader or new POS system. Instead, look for this symbol on your existing terminal:If your existing terminal features this symbol, you’re already equipped for NFC mobile payments. If not, seek one out that does. These terminals require only a small investment; they can usually be found for less than $100.
If your business is mobile, you’ll want to be able to use your phone not only to make payments but receive them as well. While peer-to-peer payment apps like Venmo have grown in popularity, they are not as convenient as the card swipe or NFC transaction that customers often experience in-store. Luckily, there are a large number of mobile card readers available to merchants. They range from full Bluetooth-enabled terminals with keypads and receipt printers to pocket-sized magnetic readers that plug into your mobile phone. Many of these readers even have the capability to accept NFC payments from other mobile phones. Choosing the best option is up to each merchant: For those who want to be able to accept a payment anytime, a pocket-sized card reader is likely more favorable, while those doing business in kiosks or booths might prefer a more traditional mobile terminal.The payments industry is continuously evolving to become more secure, convenient, and seamless. Mobile payments are the most recent step in this evolution and they are expected to keep growing indefinitely. Because of this upward trend in mobile payments usage, business owners should be working hard to ensure your business has the means to accept them. Hopping on the train early will prove to pay great dividends down the road. Businesses who are aware of current trends are able to remain competitive by staying connected with their customer base and delivering exceptional customer value.