Through the years trade relations have crucially changed. The evolution of money looks like this: barter, coins, paper, plastic, and now, phones. With the help of NFC (near field communication), companies are going to revolutionize the shopping experience and replace cash and credit cards with smartphones. People use smartphones to complete daily tasks including paying for goods and services. That’s why small businesses are encouraged to embrace mobile payments so that the customers can pay as easily as possible.
What are mobile payments?
Mobile payments (which encompass mobile wallets and mobile money transfers) are regulated transactions that take place through your mobile device. Instead of paying for stuff with cash, checks, or physical credit cards, mobile payment technology, however, allows you to do it digitally.
Mobile payments can be used in a “peer to peer” context or for paying at a brick-and-mortar business. In a peer-to-peer mobile payment, you could be using a mobile payments app, for example, to pay a friend back for dinner. In a mobile payment at a brick-and-mortar business, you’re using an app on your mobile device instead of cash or a card to pay for specific goods or services at the checkout counter. In this instance, the business would need a specific type of point-of-sale device to process the transaction.
What is a mobile wallet?
A mobile wallet is also known as mobile money or a mobile money transfer. It is essentially a digital wallet. In a mobile wallet app, you can securely add and then store the bank details associated with your credit card (some mobile wallet apps allow you to add more than one card). So instead of using your physical credit or debit card to make purchases, you can pay via your mobile device.
While card-free mobile payments facilitate and protect transactions for consumers, they are a potential gold mine for mobile vendors. According to a 2017 report by Allied Market Research , the global mobile payments market is estimated to reach nearly $3.4 billion by 2022, with a compound annual growth rate of 33.4 percent from 2016 to 2022.
If you’re still sure in mobile payment, here are top five reasons to use this technology:
It is the most convenient option for customers
Contactless payments are the most convenient transaction that can be completed a lot quicker. Mobile payments, then, allow for lower wait times at checkout which, in turn, improves the customer experience. Consumers can also access more accounts without the need to carry a physical wallet with all the different cards and cash. All the necessary data is stored in a mobile device.
It’s more secure
Using mobile wallets is more secure and reliable than using a payment card. For example, Apple Pay uses tokenization, a method aimed to encrypt customer data. Users download a mobile payment app and add credit card information to it. Consequently, the real card number is replaced with a token, which is not the real card number. The token is protected with a password or Touch ID.
It’s an opportunity to stay on top of new tech
The use of mobile payments is a shift away from a card to an omnichannel future, where the payment methods will grow drastically. Businesses can get in on these trends early by incorporating mobile payments into their app or website.
It makes bookkeeping easier
With the help of mobile payments, small businesses can reduce costs such as bank charges and overheads and can better evaluate their cash flow position.
It improves the customer experience
Mobile payments can speed up the checkout process, which goes beyond the mere ease of it. Instead, it has an impact on the entire customer experience. For example, when everyone is shopping and there are long queues at stores, people will prefer store with this system instead of other ones.