March 17, 2022
As most people today are never without a smartphone in their hand, it makes good business sense for any merchant - brick and mortar or online - to accept mobile payments. Mobile payments refer to the use of a mobile device to send or receive payment in exchange for a good or service. Your customers will appreciate the convenience afforded by being offered a large variety of payment options. Everyone has their favorite way to pay whether it’s cash, credit card or mobile e-payment - why not accept them all?
It’s not just for the convenience of the customer. There are also significant benefits to you as the seller when you accept mobile payments. When you let a customer use their mobile device to make a payment, the transaction is more likely to happen immediately, putting the money in your pocket sooner.
Accepting mobile payments is a win-win for both the customer and the seller. As this method of payment becomes more and more popular, it will become increasingly important for all types of merchants to offer. One third of Americans already report wanting to use their smartphone to make payments all of the time - this article will tell you all you need to know to help make that happen.
A mobile payment is a payment made using a mobile device, be it a smartphone, tablet, or even a laptop. The point of this type of payment method is to allow a consumer to complete transactions from start to finish using just their mobile device, with no need to take out their wallet, cash or credit card.
Merchants can accept mobile payments for a variety of different transaction types including: point-of-sale purchases, online purchases and bill payments, any sending or receiving of funds via a web browser or mobile app, using mobile wallets to pay employees and more.
When considering how to accept mobile payments, it’s important to understand the different types of mobile payments that exist. The four main types of mobile payments are : browser-based, app-based, mobile credit card, and contactless. Following is a brief explanation of each type.
Some online mobile payment services are browser or web-based, meaning that in order to complete a purchase the customer enters their credit card or other payment information into a form on a website on their mobile device.
In some cases, the website will have its own built-in payment infrastructure (i.e. sites that use Shopify) and in others (i.e. Paypal) the customer may be directed to a new browser window in order to complete the transaction. In both cases, the entire purchasing process takes place within the browser.
This is typical of many ecommerce sites where customers are meant to add their desired items to their cart and then go through a checkout process in which they enter payment details and the merchant’s payment services provider takes care of the rest.
Some businesses may choose to create their own app, and then customers can pay via that app instead of through the internet browser. This type of mobile payment works the same way as browser-based payments, just the customer enters their information using the app’s interface.
App-based mobile payments are more common among bigger businesses, in particular food and beverage companies like Starbucks and McDonald’s. It’s not limited to large businesses, however, and any company that wants to build an app can do so. There are plenty of smaller businesses who might find that the best way to accept mobile payments is via an app.
While nothing beats the convenience of shopping online, brick and mortar businesses must also know how to accept mobile payments. Customers can use their smartphone equipped with a digital wallet or other mobile e-payment solution to make a payment if the merchant has a mobile credit card reader designed for such purpose.
More and more businesses are investing in mobile card readers in order to give their customers additional payment options. This is also a good option for businesses that offer services in a customer’s home, for example, so that they can get paid right away by bringing the mobile card reader with them.
Contactless payments are quickly becoming the most often-used type of mobile payment, especially in the wake of the Covid-19 pandemic when the less anyone needs to physically touch someone else’s credit card, the better.
Similar to mobile credit card payments, the merchant is required to have an NFC reader in order to be able to accept mobile payments using this method. What is an NFC reader? It’s a simple device that a customer with a mobile wallet app simply needs to hold their phone close to (without touching it) in order for the transaction to go through. With contactless payments, there is no need for a physical card or any of the usual authentication like entering a PIN or signing a receipt.
Specific technology is required to enable vendors to accept mobile payments. While there are a few different types of technology used, including NFC and QR codes.
NFC (near field communication) technology transmits payment information stored on a customer’s NFC-enabled mobile device or credit card to an NFC reader when the two devices are within very close proximity of each other. The payment information is tokenized and turned into a random string of numbers in order to keep it secure during the transmission process.
Using QR code technology, a customer simply scans the code that the seller displays and then enters in their payment information. This is another contactless mobile payment method that is a good alternative when the vendor does not have an NFC or other mobile card reader.
Once a merchant decides to accept mobile payments, the next question they may ask is what are the ways and methods to accept online payments. The process is very simple, whether you have a brick and mortar location or an online shop, and requires you to have the correct hardware and software for mobile credit card processing.
If you have a physical store, you need to take the following steps:
If you have an online store, the process is the same with the exception of the need for the card reader. Some platforms may offer built-in payment functionality, but most likely you will need an online payment service provider that will enable you to accept payments online and will be able to set you up to accept mobile payments as well. For additional reading on the topic, here you can find 7 steps on how to accept payments on your website.
Once you’ve got your system up and running, make sure you let your customers know that you are open for business and ready to accept mobile payments. You can add it as a prominent piece of information on your website, advertise in social media posts and send emails to your mailing list to let your audience know that they have additional payment options.
If you want to take it a step further, you can even offer incentives such as special discounts to encourage people to use mobile payment options instead of more traditional purchase methods.
There is no shortage of mobile payment apps for consumers to use. Merchants can choose which types they would like to accept. This decision should be based both on how popular the method is - you want to be sure you offer all of the payment methods that your customers like to use - as well as after doing a cost analysis and making sure that you won’t lose money on transactions. Each payment app may have a different fee structure.
It’s also important to consider whether your customers are primarily iOS or Android users as the best way to accept mobile payments will be to offer the solutions that your customers are most likely to use.
Following is a list of some of the more popular mobile payment apps and whether they are compatible with iOS, Android or both:
Accepting mobile payments affords a business numerous benefits, including:
The two biggest risks to a business when it comes to accepting mobile payments are the costs and security.
Any decision that you make as a business owner concerning costs comes with the risk of the costs outweighing the benefit that you may gain. Accepting mobile payments comes at a cost that includes a setup fee plus one or more of the following: a percentage of the transaction amount, a flat fee per transaction or a monthly fee. While the decision should not be made without doing a cost-benefit analysis, it is impossible to predict for sure that the sales brought in with mobile payments will be greater than the costs. Given the growing popularity of mobile payments, it’s probably a fairly safe bet, but remains a slight risk nonetheless.
The security risk of mobile payments is probably more of a perceived risk than an actual risk given the protections built in with the technology. But, there is still the risk that consumers will be nervous to use mobile payments because they are worried about security which can impact a business’ bottom line. And, of course, there is also the remote possibility that a merchant can become a victim of fraud while accepting mobile payments.
All of the well-known mobile payment apps have similar security features such as passcode locks, two-factor authentication and other methods of ensuring that the person making a purchase using the app is the actual authorized user.
The larger apps like Apple Pay and Google Pay with big companies behind them may offer tighter security than some of the newer or smaller players, but you’re likely to be safe from any major threats with any of the big names like PayPal, Venmo and more.
Among the many options offered by Pay.com is the ability for online merchants to accept mobile payments. It’s very easy to integrate any of the payment methods of your choice including Apple Pay, Google Pay, Samsung Pay and other mobile payment apps. You can also, of course, create QR codes or other direct links to your checkout page powered by Pay.com so that your customers, wherever they are, can have direct access to pay you using a mobile device.