How You Can Get in the Mobile Payments Game
As adoption of mobile wallets continues to grow, merchants who don't adapt to changing times may fall behind competition. By the end of 2015, Deloitte estimated five percent of the world's roughly 600 million near-field communication-enabled phones will be used to make a payment at least once per month. (1) In addition, Forrester predicted mobile payments in the U.S. will reach $142 billion by 2019. (2) The wave of mobile payment adoption is just getting started, but it's important for merchants to pay attention to this trend.
Benefits of mobile payments
While implementing new technology may seem daunting, there are many benefits to accepting mobile payments. For one thing, the more payment options you offer, the happier customers will be. But the advantages don't end there. For instance, mobile payments are often quicker than traditional payments because they only require customers to tap their phones on a card reader. Mobile payments are also great for consumers because they allow shoppers to consolidate the items they carry with them. Rather than grabbing their wallet and phone, they can simply pick up their phone and be on their way. Since mobile devices have become so central to the way people live their lives today, it just makes sense to integrate payments into this technology.
Finally, NFC payments are more secure than traditional payments. Mobile wallets often require a token to perform a transaction, making it more difficult for fraudsters to steal sensitive information. In addition, mobile payments make it unnecessary for customers to hand over a physical card, reducing the possibility of theft or card skimming.
The following are five steps to get started with mobile payments:
1. The right payment processor
Before you attempt to implement mobile payment technology, it's a good idea to consult your payment processor. Some companies only accept specific forms of mobile payments. You want to work with a partner that will provide greater options for you and your customers. Don't limit yourself to a payment processing company that only accepts one form of digital wallet; this will restrict your potential customer base. Work with a payment processor that has deep payment expertise so they can help you in the transition.
2. NFC-enabled equipment
To accept payments from customers with mobile wallets, you will need to purchase equipment that reads near-field communications (NFC). NFC technology allows two devices to communicate with one another over a short distance. An NFC-enabled point of sale system will allow merchants to accept payments from customers with mobile wallets like Apple Pay or Google Wallet. For all merchants that have yet to upgrade to EMV-enabled credit card processing technologies, now is a good time to implement NFC-enabled tools as well.
3. Mobile card reader
There's more than one way to go mobile. Investing in a mobile card reader is another way to mobilize your payment processing. These card readers attach to a mobile device so merchants can accept payments from anywhere, whether that means a pop-up shop or farmer's market. Many mobile card readers also accept NFC payments, so you can take a wide variety of payments, even when you're on the go. Mobile card readers also give merchants the ability to accept payments from anywhere in the store, so they can break up lines and improve customer service.
4. Gift cards/stored value
Another way to get started with mobile payments is to implement a stored value or loyalty card program. Many loyalty cards can be converted into digital gift cards to allow customers to use their phones to pay. In fact, digital gift cards are growing at a rate of 200 percent, compared to just six percent for plastic gift cards. (3) Merchants can get ahead of the curve by implementing digital gift cards now. You can also integrate cash back rewards and automatic reloading features to give customers even more options for engaging with your business.
Once you are ready to accept mobile payments, make sure customers know they can use their mobile wallets in your store. You could use email marketing to send out a message to customers to make them aware of the new technology or post signage throughout the store to draw attention to the updated payment processing tools. Some customers have the ability to make mobile payments but still have yet to get on board with the practice. Consider creating a blog post educating customers on how to use mobile wallets to increase adoption at your business.
Mobile is the future of the payment world. Merchants should upgrade their equipment now so they can accept payments from customers who want to use their phones to make payments. Being an early adopter of mobile payment technology will encourage customers to think of your business as cutting edge, which can serve to differentiate you from competitors.
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