by Kyla Camille | Negosentro.com |
According to the annual Global Mobile Money report by the Mobile Ecosystem Forum (MEF), 66 percent of mobile users carried out a financial transaction on their smartphones. They also found 25 percent of feature phone users named social media apps as their primary destination for mobile commerce.
The revolution of mobile payments isn’t coming, it’s already here. Paying with our phones is now commonplace with options to use mobile wallets and platforms like Apple Pay and the new Android Pay. Here’s a look at what’s happening in the mobile payment space and how businesses can adopt the newest technology.
Mobile Payment Options
Getting up and running with mobile payments is relatively easy, but the options are endless. The big players are Apple Pay and the newly launched Android Pay, and the newly emerging Samsung Pay. How does it work? Near Field Communication allows the phones to interact with a vendor without scanning a card. Consumers put their finger over the Touch ID or click their home button a few times to secure the purchase.
Meanwhile, EMV stands for Europay, Mastercard and Visa and employs chip card technology to take payments. While that’s been the standard for quite awhile, as of October 1, companies are legally required to upgrade to the latest secure chip cards or be held liable for any losses due to credit card fraud. Fortunately most processors are already on board like Square Up.
Mobile Payment Devices
To accept multiple mobile payments, small businesses can use Square Up. The system lets businesses choose between a computerized stand to replace a cash register, chip reader to accept EMV and NFC payments and a magstripe reader. The latter fits into your smartphone and can swipe credit cards on the go. It’s easy to integrate with Apple Pay and catch busy consumers who just want to use their phone instead of dig out cash.
Being able to accept fast mobile payments directly impacts how much some businesses can scale. For example, King of Pops in Atlanta took over the city with small push-carts and even sells its artisanal Popsicles at major sporting events. To keep turning a profit, they use Square Up so vendors can accept debit and credit card payments instead of only relying on cash. Because their stands are mobile, it’s only natural for consumers to stop by, use their smartphone to pay, and instantly enjoy a treat.
Authentication Methods
To keep consumers and small businesses secure, companies use authentication methods. The process generally includes authenticating yourself with something else using a device, using your fingerprint or other physical means of authentication or using your device as a way for a bank or other institution to do a voice or facial recognition.
But the latest trend uses biometrics to ensure someone’s identity through the use of biometrics. Many smartphones, including the iPhone 6, use fingerprint scans as an extra layer of security just to access their device. Mobile payment processors can use that same concept to identify someone’s identity. PayPal already integrates with a Samsung Galaxy S5, Tab S, Note 4 or Alpha device to make it possible to pay with a fingerprint scan.
Business is Booming
Starbucks reported they made 7 million mobile transactions each week, accounting for 16 percent of its transactions. But Starbucks also employs another technique that many retailers don’t. They’ve integrated a loyalty and rewards system along with their mobile payment systems to give even more benefit to their consumers and entice more sales.
There’s another reason why many businesses are adopting mobile payment methods. They often extend cheaper service fees than credit cards, putting more profit into a business’s pocket. However, it could take time to see a real profit from transactions. The Gates Foundation says merchants must process 30 to 50 transactions per day to keep mobile payments profitable.
Whether you’re already planning to switch to mobile payments or still researching options, the real question is when you’ll adopt the new technology, not if. As more consumers pay on the go with their phones, more businesses will respond to the trend and ditch cash transactions.
