Pew Research Center reports that 96% of people in the United States own a mobile phone of some kind and over 80% own a smartphone. So, it should come as no surprise that mobile payments are starting to take off. A company’s ability to accept mobile payments came to fruition 10 years ago but remained stagnant until 2010, when it reached its tipping point with the massive adoption of smartphones. Over 61.6 million American’s are expected to use mobile payment this year up from 55 million in 2018. Given these statistics it’s reasonable to assume that as more businesses start to accept mobile payments, customers will begin to expect it more and more.
What are Mobile Payments?
According to Investopedia:
A mobile payment is a money payment made for a product or service through a portable electronic device such as a tablet or cell phone. Mobile payment technology can also be used to send money to friends or family members, such as with the applications PayPal and Venmo.
Many banks have recently adopted technology into their banking apps that allow customers to send money instantly to friends and family members directly from their bank accounts. Mobile payments are also made on-site at stores by scanning a bar code on an app on your phone, accepting payments from convenience stores to large, multi-national retailers.
Getting into the Details
Online and mobile payment solutions have given businesses and customers more options, but they can be complicated to navigate and implement. Setting up payments and credit card processing services can be a complex and time-consuming process, but that is changing. In the past, businesses needed a physical phone line, a leased credit card machine, and had to factor in processing fees and other charges to their costs. Companies used to actually limit their earning potential depending on which payment solutions or credit cards they did or did not accept. But now there are innovative payment solutions available for any small business.
Innovative payment solutions have made financial applications, smartphones, and even smartwatches, viable ways to pay. Mobile payments services are the financial equivalent of an Uber. With just a few clicks on a smartphone app, anyone can send money to someone across the restaurant table or a supplier on the other side of the country. As financial techs continue to launch innovative, affordable, and intuitive services, small businesses are finding they have more and more options available to them.
Statista found the following data regarding the leading payment methods used for online transactions in the United States in 2018:
45% Stored credit card
17% Manually entered credit card information
5% Amazon Pay
4% Pay on delivery
2% Google Pay
2% Apple Pay
People use most those things with which they are most familiar. As such, the data make sense given PayPal’s initial launch was in 1998, followed by Amazon Pay in 2009, Google Pay in 2011. Apple Pay, initially launched much later in 2014, has made a quick surge but that is not unusual for an Apple product given the fierce brand loyalty of their users.
Considerations for Brick-and-Mortar Brands
A retail-based merchant that sells products and services in a fixed location will need to consider a point-of-sale (POS) solution. Few companies can compare with Square's suite of POS payment solutions. With a flexible yet predictable pricing structure, the Square POS is built on an established credit card processing service that provides small businesses with a good deal of latitude for their brick-and-mortar as well as ecommerce needs.
Retail and mobile customers get a free Square Chip Card Reader that can be used for swiping credit cards. If a business desires a contactless payment option, they can purchase Square’s $49 Reader that facilitates those transactions. There are also options for mounting an Apple iPad as a permanent POS solution or an all-in-one Square Register that offers customer-facing hardware.
Online Payment Solutions
E-commerce eliminates barriers such as distance and location allowing even small businesses to operate on a global scale. Consumers like the flexibility and convenience of buying online, and as a result, online retail sales are at an all-time high. Statista reported that ecommerce accounted for 11.2 percent of total retail sales for the fourth quarter of 2018, the highest share ever.
Consumers continue to show an interest in having multiple options when it comes to making online payments. Small businesses need to decide which payment options work best for their potential customers. Considerations include the attached retail and online charges, and the ability to process international payments or multi-currency support could be something to consider. Businesses also need to ensure that their payment gateways adhere to the compliance regulations of the Payment Card Industry Data Security Standard and that they use ample security methods to prevent fraud.
Cashless and contactless payments such as mobile payments made via smartphones and smartwatches aren't just convenient, they are inherently more secure than debit and credit cards. Smartphones have built-in biometric solutions such as fingerprint and facial recognition sensors that are harder to hack than personal identification numbers or passwords.
With the myriad of payment solutions available to small businesses, one of the most important considerations is the nature of the business itself. Their choice needs to integrate seamlessly into their business model. Brands also need to choose methods which make the most sense for their users and customers.
Benefits of Accepting Mobile Payments
There has been a simultaneous increase of small businesses conducting their work remotely and people within a number of industries having the option of working remotely as well. Combine that with the fact that ownership of wireless devices continues to rise and it is difficult to argue that businesses will benefit from adapting to our on-the-go society and accepting mobile payments.
Cash flow is more critical than ever in our current economic times and mobile payment acceptance means getting paid more quickly. When a small business decides to accept mobile payments, they are able to collect at the time of product or service delivery. Small business owners no longer have to wait until they get back to the office to mail an invoice or wait for a check.
Accepting mobile payments from anywhere means more sales. By offering multiple payment options, businesses no longer have to turn away customers who have a payment preference different from what is accepted. Small businesses that expand their payment offerings will have a tremendous advantage over their competitors that don’t accept mobile payments or have limited payment offerings.
Payment convenience increases your customers’ user experience. Eliminating friction within the payments process and having the ability to say “yes” to any method a customer wants to use to pay you will help you keep your customers satisfied. Mobile payment acceptance makes transactions so incredibly simple and convenient that your customers will come back to do more business with you.
When a business decision results in benefits for your brand, it only makes sense to jump in with both feet. As you research mobile payment options to incorporate into your business, keep in mind the benefits:
Adapting to our on-the-go society communicates your desire to accommodate your customers’ needs and desires.
Payments are processed more quickly.
Mobile payments can increase your business revenue.
By offering multiple mobile payment options, improves your customers’ experience.
For small businesses, mobile payment acceptance represents a great opportunity to increase cash flow while being more efficient and providing better customer service. Small businesses should research their options and start accepting mobile payments today.
The experts at Strategy Driven Marketing would love to learn more about your brand and business goals. We have extensive experience helping organizations create and maintain ecommerce websites that are an expression of their brand and direct channel to their customers. From creative and front-end development to functionality, responsiveness, and more, SDM can help you provide an amazing user experience that will create a buzz about your brand and keep customers coming back time after time. Contact us today to learn more!