Enabling mobile payments is a smart move for business owners. The World Bank recently reported that 52% of adults make or receive mobile payments. Additionally, according to Allied Market Research, global mobile payment transactions will be worth more than £3.5 trillion by 2023, following growth of 33.8% compound annual growth rate (CAGR ) between 2017-2023.
Integrating mobile payments into your payments strategy is as beneficial for you as it is for your customers. Offering ease and speed for customers as well as expanding your businesses' reach while reducing transaction costs are just some of the advantages of accepting mobile payments.
Understanding Mobile Payments
Although the payments industry typically uses mobile payments as a general term, there are actually three applications of mobile payments to consider for your business. First is the technical ability to accept payments via mobile wallets as a payment method from your customers. Customers use their phone’s mobile wallet via Apple Pay, Google Pay or Samsung Pay and “tap to pay” at the point of sale.
The second application refers to in-app mobile payments where a customer makes a payment through your merchant app from their mobile device.
The third application of mobile payments is in-person payments through a mobile point-of-sale (mPOS). An mPOS solution typically includes an app on a mobile phone or tablet paired with a mobile credit card reader. It may also include a cloud-based merchant portal for reporting and managing users and inventory lists. This solution provides payment efficiency when your business is mobile or you need an extra checkout lane to help manage lines in-store.
Determining the best use for mobile payments in your business can supercharge your growth potential. We’ll show you how each application can impact your business.
Application #1: Accept Payments via Mobile Wallets
With the introduction of mobile wallets like Apple Pay, Samsung Pay and Google Pay, your customers can now pay via their mobile phone. A mobile-first approach to sales is the new normal for businesses in commerce. Capturing sales from the hand-sized device your customers carry in their pockets or purses comes with extraordinary benefits.
Reach More Customers
Consumer adoption of paying via mobile wallet is nearing a tipping point globally, while in certain regions around the world like Asia-Pacific and London, it has already tipped. It only takes one disruptor to push paying by mobile phone into the mainstream and when it does, you need to be ready.
Consider London which enabled mobile payments across its entire public transit system in 2014. Today, an astounding 53,000-plus new contactless mobile or card payments are made each day through that transit system alone. Why did London make this bold move to accept mobile payments?
Because it can reach more customers.
Your customers are already using their mobile phones as an extension of themselves so bringing the retail experience to their mobile device makes great business sense. With every business sector from micro-merchants to big-box retailers enabling mobile payments at a rapidly growing pace, the motivation for adoption is strong.
It’s Fast and Convenient
Today, biometric authentication speeds up the transaction process. Once the mobile wallet is activated, your customer simply hovers his or her mobile phone over your point of sale to complete a transaction in a matter of seconds rather than minutes, saving time and effort for customers and retailers.
Mobile payments can be more secure than using a credit card on a traditional point-of-sale terminal. When using a mobile wallet like Apple Pay and Samsung Pay, the customer’s credit card number never enters the equation. The information taken from the card during the transaction is not the card number, but a tokenized version of that data, plus a one-time number tailored to the individual sale. The same process occurs when a customer uses their mobile wallet to make an in-app purchase. This is an important security measure for businesses. According to the latest IBM report, the average cost of data breach in the UK rose by 8% over the past year to reach nearly £2.7m. Tokenizing payment information provides an extra layer of protection for your business.
Application #2: In-App Mobile Payments
In addition to all the benefits of enabling payment by mobile wallet mentioned above, providing a branded mobile app with in-app payment functionality offers additional value to your brand.
Accepting in-app payments gives you another way to build loyalty with your customers. Increasingly, consumers are moving to the mobile channel to make purchases and you have the opportunity to encourage them to spend their dollars with you by tying in-app purchases to your loyalty program. In doing so, there are many enticing offers you can extend to your customers to strengthen their loyalty to your brand. For example, you can encourage them to perform specific actions to receive a special benefit. You can reward them with valuable discounts or incentives. When you get to know their buying behaviors, you can send personalized offers directly to them. Incentives and rewards like those stated here create stickiness to your brand and as a result, you will be rewarded with more engaged customers and increased sales.
Consider Starbucks as an example of building loyalty using in-app payments technology. Starbucks drives purchases through its mobile app because it rewards its customers with loyalty points when they use Starbucks’ mobile app to pay. Not only can its customers get loyalty points, but once Starbucks learns their customers’ buying patterns, it delivers personalized offers to keep them coming back. Consumers are happy to use Starbucks’ mobile app for purchases because it’s convenient and easy to use with mobile ordering and fast checkouts. As a result, Starbucks has turned its app users into 12.3 million fans, surpassing usage of any of the mobile wallets.
Build Your Brand
Building an exceptional in-app payments experience can help you win and retain customers. Google partnered with research firm Purchased to evaluate the importance of brand building via mobile. It found:
89% of people are likely to recommend a brand after a positive brand experience on mobile.
Two times more brand experiences happen on mobile than anywhere else.
Nearly 9 out of 10 people would buy from the brand in the future if they thought the mobile brand experience was helpful or relevant.
Your branded mobile app is a welcome mat for your business. Businesses that offer a customer-centric buying experience are benefiting greatly in the name of sales and repeat customers.
Application #3: In-Person Payments through mPOS
When you’re a business owner serving customers on the go, an mPOS allows you to turn your mobile device, either a tablet or phone, into a point of sale. If you have a physical store presence, mPOS can become a handy way to offer an extra checkout lane from anywhere in the store. Either way you use an mPOS, your customers realize a tremendous amount of value when you make paying easier for them.
An mPOS like Mobile Pay takes chip-enabled cards, contactless, and magstripe forms of payment. It also tracks your cash and check payments. No need to worry over sending an invoice later or ensuring your payment has been applied, an mPOS manages all this for you.
Long lines are one of the biggest sources of frustration for shoppers. According to global research, 51.3% of consumers left a store without buying an item because the line was too long. In a world of rising expectations businesses are facing mounting pressure to cut wait times and improve customer satisfaction. In response, many brick-and-mortar retailers are implementing mobile point of sale to reduce friction in the checkout process, saving their customers time and frustration. If this sounds like a problem you’re facing, an mPOS could be a welcomed solution.
Data and Insights
Using a cloud-based inventory list, you can easily create and update a sales item or goods inventory through a mobile point of sale like Mobile Pay. This ensures that all product information, from descriptions and pictures to prices, tax, and even barcodes, is kept at your fingertips. This essential data helps you make informed decisions to manage and grow your business.
The shift to mobile payments in the context that makes sense for your business gives you the opportunity to meet and exceed your customers’ needs. In the age where speed, convenience and security matter most to your customers, mobile payments offer it all, and businesses that partner with the right payment technology company to achieve these results safely, easily and with a high level of sophistication are enjoying a healthy competitive edge.