Mobile payment technology has steadily gained immense popularity from businesses and customers looking for a convenient way of making and receiving payments. While there are several forms of mobile payments, the term “mobile payments” refers to transactions done from mobile devices. This payment allows businesses to receive payments from apps, such as Samsung Pay, Apple Pay, and Google Pay, which customers download on their smartphones.
While some businesses use these payment methods already, others are still at crossroads, debating if they should consider them or not. Well, below are some insights that can guide your decision.
Did you know more than 50% of customers don’t carry cash every day, and if they do, they carry less than $20. This is a small amount that can’t make significant purchases. Even though some may prefer to make payments for large purchases using credit cards, customers may easily forget their wallets containing their credit cards at home. And, while many people forget their wallets regularly, you hardly hear of anyone who has forgotten their smartphone.
Smartphones are practically attached to everyone’s hands. Mobile payments allow customers to easily pay for their goods and services. Easy payment options also help breed customer loyalty. That aside, you can equip your sales teams with this payment technology. This means customers can pay for their goods anywhere in the store instead of having to queue.
Tracking trends is important as it helps businesses identify customer trends, especially the highest purchases and customer spending patterns. Mobile payments make it easy for businesses to analyze such customer data and identify trends. This information can then help tailor sales and marketing promotions. Tracking customer data also enables businesses to craft customized product and service recommendations based on customer’s previous purchases.
The 2011 Federal Government policies on credit and debit card transactions interchange fees capped the processing fees for purchases made with a debit card but didn’t restrict credit card processing charges. Therefore, businesses that accept credit cards can now save money by onboarding mobile payments.
Several mobile payment options charge much lower transaction fees compared to some credit card providers. Others offer a discounted fee for a specified amount of credit card purchases monthly. Even if mobile payment technology is only saving you a few cents, it can add up to significant amounts throughout the year.
Cyberattacks are a real threat to businesses and customers using digital payments. A compromised point-of-sale payment system can have disastrous financial effects on a business. However, mobile payments alleviate some security concerns. For instance, instead of keeping your customers’ debit or credit card numbers, mobile payment technology uses tokenization, which secures this information.
While mobile payments are beneficial, you should be wary of the following risks;
While mobile payments provide enhanced security, they are also a security threat just like any other transaction that depends on internet service. As mentioned, these payments use tokenization to encrypt customer data. However, businesses should ensure that they use the latest encryption technology to protect the business and customers from data theft.
Different customer expectations
While mobile payment technology is overly convenient, it only really appeals to a young audience. Therefore, it may not be convenient for an older audience that is less tech-savvy. You should assess your customer demographic data before implementing this payment technology.
Integrating mobile payment technology into your business can position you ahead of competitors and help boost sales. However, getting started can be quite costly, as you will need to update your POS systems to accommodate this technology. Therefore, conduct a cost-benefit analysis and weigh its pros and cons to determine if your business gains from this technology.