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Mobile payments

Mobile Payments: a Quick Primer

Brant Schelhaas

In retail and eCommerce, there are a few ways customers can expect to make payments. The most common forms involve cash or credit cards. There are an increasing number of customers that seek to skip both of those and use their mobile devices, including smartphones or wearables like smartwatches, as their payment method. This is what's known as mobile payments.

Retailers can leverage the mobile payment acceptance trend to make it easier for customers to buy the things they want. They can also double down on consumer convenience by investing in mobile point of sale systems that speed up the sales process even further. However, it's vital for merchants to first understand the difference between mobile payments and mobile acceptance.

Mobile Payments: a Quick Primer
To most businesses, mobile payments are equivalent to mobile wallets, representing the consumer side of the equation. In this circumstance, the people making purchases will frontload their credit and debit card information onto an application in their smartphones or smartwatches, and use that as the means to make a purchase. When the time comes to buy, they will open the app and tap their mobile devices to the appropriate scanner or reader using near-field communication, or some other technology to complete the payment. (1) Authentication occurs often through biometrics such as fingerprint scanning. This method of payment will become increasingly popular as more people use their smartphones to a greater degree. The primary advantage of using this method for customers is to simplify payments and minimize the need for a wallet, along with having better control over personal finances.

Mobile Acceptance: the Transaction Side
Mobile payments acceptance, on the other hand, focuses on the retailer side of things. It refers to multiple aspects of payment acceptance. The most common of these are essentially mobile POS systems. (2) These are software platforms that run on mobile devices, particularly smartphones or tablets, and can receive any form of payment. That includes credit and debit cards through a card reader dongle and cash through an integrated drawer.

Retailers should also consider mobile acceptance to include digital wallets such as the ones described above. Through the use of NFC authentication and biometrics, a retailer can complete a payment without needing a cash register at all (device-to-device transaction), complete with sending the customer a receipt via email. Retailers that use this method of payment encourage more agile operations, making it easier to complete transactions anywhere in the store.

  1. http://mashable.com/2013/05/10/mobile-payment-apps/
  2. http://www.merchantmaverick.com/ultimate-guide-accepting-mobile-payments/

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