Advantages of using mobile payments.

 

Why use Mobile Payments?

Mobile payments via digital wallets were already becoming more prevalent as consumers became increasingly comfortable with the technology, and as more merchants offered terminals that accept mobile payments from devices at the point of sale. With COVID-19, of course, contactless payments are even more appreciated. Now, 67% of shoppers want self-checkout options from mobile devices 

Mobile payments can be used in a peer-to-peer transfer or for paying at a brick-and-mortar business. Mobile transfers are quick and allow you to forgo the hassle of dealing in cash and checks. The other reasons can be cited such as:

• Saves Time: Contactless Mobile payments are by far the fastest way to pay, consuming only a few seconds. To compare, they’re slightly faster than swipe payments and much more so than the sluggish EMV chip payments. For businesses such as retailers that have checkout lines, such contactless payments enable the queue to move faster resulting in shorter pay time.

• Provides Convenience: Smartphones are owned by more than 81% of Americans and are more within reach than wallets for many. Mobile payments are a natural extension of all the daily tasks that users demand of their smartphones, from checking the weather to updating their social media accounts. Adding payments to a device already consistently used makes the process easier and more convenient than ever before.       Urban Indians prefer carrying lesser cash, and with the ubiquity of mobile phones instant payments happen to be the most viable medium.

• Secure: Mobile payments have multiple layers of dynamic encryption, making them an extremely secure way to pay. They’re far more secure than magstripe payments and just as secure as EMV chip card payments. In fact, if you’re using a mobile payments app with fingerprint ID, it’s arguably more secure than an EMV chip card payment.Mobile payments reduce or eliminate the need for consumers to carry payment methods like cash and credit cards, meaning that these payment methods are less likely to be lost or stolen. Digital wallets also provide extra layers of biometric authentication such as fingerprint scans and/or facial recognition, assisting businesses in ensuring payments aren’t fraudulent. Finally, mobile payments are often tokenized during transactions. This means that sensitive account holder information is replaced by tokens that fraudsters cannot use if intercepted during payment sessions, increasing security for both businesses and consumers.

• Integrate and increase incentive programs.

  One of the biggest benefits of using a mobile payment option is the ability to integrate loyalty and incentive programs into the mobile payment applications. Instead of customers having to keep up with punch cards or key ring tags, all of their information is stored in the application each time they make a purchase with their mobile device. “If businesses use technology to link a payment to their points or other loyalty programs then it adds value to the customer. This makes the customer want to return, which then increases revenue,” Signorini says.

• Ability to offer credit card payments.

  Previously, many small businesses, especially those operating at remote locations such as a farmers’ market or a food truck, were unable to accept credit card payments. Being a cash-only business often decreased sales because customers without enough cash on hand were unable to buy their products. So when a cash-only business can start to accept credit card payments through a mobile payment program, they immediately increase their customer base and increases sales.

• Track customer trends and inventory.

  A common struggle for small businesses is tracking inventory and customer behavior. But with mobile payment services, you can automate these processes and better serve your customers. “Small businesses using mobile payments can now track what product and services they are selling to understand customer demands. Not only can they now capture payment information, but they can learn about their customers and use that information to improve service,” Signorini says. For example, a business can use the purchasing data to learn that they sell a lot of chicken sandwiches on Thursdays, and make sure that they have enough ingredients on hand. By meeting customer demand, they increase product sales and improve customer service.

• Save money on credit card fees.

  Some mobile payment companies charge less per transaction than credit card companies, which equates to direct savings for the company. Garabedian says that one of the reasons he uses level up for mobile payments is that he doesn’t pay any transaction fees until a customer meets incentive levels. With square mobile payments, the business pays 2.75 percent of each sale as the transaction cost, which is a lower fee than those associated with some credit cards. Since each company structures payment differently, investigate the different mobile payment programs to determine which is most cost effective for your business.

Nowadays, as more and more online shops are integrated with one-click purchase which has dramatically changed the mCommerce landscape, shopper expectations for their shopping experience have are also vastly changed. 

These changes—or rather, these technological transformation in the mobile payment systems—can undoubtedly boost every online store’s revenue and conversion rates. It is thus that adopting the current best practices while they’re fresh is an ideal and most profitable strategy for retailers.