If you haven’t yet paid for a transaction using some sort of mobile payment option, you likely will soon.
Americans will spend a projected $37 billion in mobile payment transactions in 2013, according to research firm Gartner, Inc. As smartphones and tablets become increasingly common, more mobile services are emerging to help businesses meet customer demand for flexible payment options.
Many businesses already accept credit card payments, but new technology is making it even easier. Card readers that connect to a smartphone or tablet allow businesses to make sales nearly anywhere, from the business location to an outdoor event or even the customer’s doorstep.
Mobile payment services typically operate in the same manner as traditional credit card processing systems. The business pays a percentage of each transaction to the payment service, which then deposits the funds in the business’s account.
Mobile payment services can be every bit as secure as a traditional credit card processing system, provided that the data is encrypted and transmitted securely. In fact, some experts believe mobile payments can be even more secure, offering password protection and other security features. After all, your wallet doesn’t come with password protection.
Some cutting-edge businesses are even accepting payments via digital applications such as Google Wallet. These applications allow a customer to simply hold his or her mobile phone in front of a sensor that will then transfer funds from a specified bank account to the business.
Businesses that are considering offering mobile payments should:
Consider what its customers want. Mobile payments aren’t for every customer or every business. Talk to company representatives who interact directly with customers and find out what options are being requested.
Stick with a reputable company. Square and Intuit GoPayment are two of the most popular providers, and many financial institutions offer a similar service.
Understand the terms of the service. Find out if the provider charges a percentage of each transaction or a flat fee, as well as what other restrictions or charges apply.
Verify encryption and other security features. Ensure customers’ financial information will be handled with the utmost care.
Many businesses find that adopting flexible payment options helps them attract more customers and increase revenue. It will certainly be interesting to see how mobile payments evolve in the coming years, and how businesses adapt as a result.