Gone are the days when customers would just rely on cash or their handy cards to make payments. We are now entering a very exciting stage of making purchases where mobile and online payments take center stage.
Mobile payments encompass another payment method that makes use of portable electronic devices such as tablets or mobile phones. While mobile payments started out as an alternative payment method, it won’t take long until they become the standard, especially now that online payments already made a name for themselves. With consumer behavior also leaning towards an increased dependence on smartphones, it just follows logically that consumers are also gravitating towards mobile payments.
Suffice to say, more merchants are now accepting mobile payments as part of their menu of payment options due to the number of benefits mobile payments offer. For customers, they prefer mobile payments since they offer an easier, secure, and more private way to pay.
Through the years, the spectrum of mobile payments have broadened so much that it does not only mean paying using a phone. Now, the term “mobile payments” could mean any of these things:
- Mobile eCommerce, or simply mCommerce, which involves using your mobile device to make purchases online via apps like Amazon
- Mobile peer-to-peer or P2P, which includes services such as PayPal, SnapCash, or Google Wallet, that allow you to send money to family and friends free of charge
- In-store or contactless payments, which involves the use of a phone to pay instead of swiping a credit card or paying with cash
- Mobile credit card swiping, also termed as mobile processing, which refers to merchants using their phones or tablets to accept cards rather than using a traditional POS terminal
This is just one of the amazing things around mobile payments that you probably didn’t know. We listed five more about them, which are as follows:
1 - Mobile payments are made possible via wireless terminals
Wireless terminals have been around for years and use the General Packet Radio Service (GPRS) and Code Division Multiple Access (CDMA) wireless networks. The terminal uses a wireless carrier to send data wirelessly. In the early years, using mobile payments meant you had to sacrifice something. Sometimes, the signal was not strong enough for the transaction to process, which meant that the transaction could drop halfway through transmission. The systems seemed to work a bit slower and to conserve battery life, they would “go to sleep” when not in use. When “waking up,” the terminals required more time to be fully online, causing delays when trying to complete a sale, and ultimately, poor customer satisfaction.
2 - However, it is Apple that can be attributed as the one that truly started the mobile payments boom
The concept around mobile payments have already been buzzing in the early 2000s but due to the early challenges of wireless transactions, it became one of the least viable payment options in the market. It only truly took off around 2014 when Apple Pay was launched in the market. It has solved the spotty signal issue by making use of near-field communication or NFC, a technology that allows a smartphone to establish radio communication with another device by touching them together. Apple Pay does not also store the actual card numbers on the device or on Apple servers. Instead, it assigns a unique Device Account Number and creates a dynamic security code to securely validate each transaction. Apple Pay was designed to hopefully reduce the potential of fraud, which both merchants and customers loved.
3 - Mobile payments also paved the way for specialized restaurant solutions
The potential mobile payments offer to merchants inspired the innovation of other specialized solutions, and one of which is Vivonet’s Halo for Restaurants (now Infor POS). It is a web-based, touchscreen management solution that allows merchants to monitor and manage a single table, limited service store, or an entire franchise chain by using a web browser. It can change prices, add menu items, manage touch-screen terminals and drill down to the transaction level of detail in real time. The technology is complemented with Halo Mobile, where the merchants’ customers can place orders, pay, and set pick-up times using their smartphones.
4 - Mobile payments can make use of images called QR codes
With mobile payments, customers can now make use of their phone cameras to scan for quick response or QR codes to make payments. This system works by using certain banking apps where cards are already associated and other apps by stores where card details can be connected. This is another great alternative that some eCommerce businesses use instead of manually entering card details. This technology helps establish mobile payments as a more secure way to pay since it is the mobile device that confirms a customer’s ownership of the card and not because the unencrypted card details are typed on a device screen. By using codes instead of manually inputting all the necessary card information, mobile payments have also become faster.
5 - Now, mobile is the new wallet
Recently, eMarketer co-founder Geoff Ramsey shared how mobile payments have become the fastest-growing retail commerce channel in the US. He further reveals that there are 167 million in the country who regularly purchase products using their mobile phones, comprising 84% of all e-commerce buyers. This made mobile phones not just a communication device but an equally active buying machine.
These features on mobile payments will give you a deeper sense on how it has influenced the market. This is an additional tidbit merchants should know just in case they are still considering the acceptance of mobile payments. If you are one of those merchants, stop considering and start accepting them now. You will see from how mobile payments evolved that they were able to maximize their assets and advantages to influence consumer behavior in such a way that they have become one of the most preferred options to date. If you’re able to accept mobile payments as early as now, your customers will appreciate you more for it.
Partnering with a payment solutions company is critical in the success of a business, especially when considering mobile payments. Agapay’s in-depth expertise about mobile payments and other payment processing options will help you fully capitalize on the advantage of each. If you wish to know more information about mobile payments and how to use them to your business’ advantage, reach us here or call us at 800 644 3909.