Most consumers always have their smartphones and tablets with them. So, whether you sell your products or services online or in-store, adding a mobile payment system is crucial for providing a smooth shopping experience. Mobile payments help business owners connect better with customers, protect personal information, and increase sales. In this guide, we’ll cover some of the best and most popular mobile payment options and show how merchants can handle challenges and enjoy the benefits. Keep reading for all the details!
What Are Mobile Payment Systems?
Mobile payment systems let you pay for things using your Apple or Android smartphone, tablet, or wearable device. You can use these systems with major credit, debit, and gift cards, as well as bank account information.
You can make mobile payments through different options, like digital wallets (Apple Pay, Google Pay, Samsung Pay), mobile banking apps, and payment apps (PayPal, Venmo). You might also want to check out a reliable service provider like Paytower before choosing.
Because they are so widely available, these payment methods are becoming very popular in global commerce and are driving significant growth in non-cash transactions. Let’s look at the various mobile payment options available to everyone.
Types of Mobile Payment Systems
Today, there are several types of mobile payment systems:
- Browser-Based Payments: You can enter payment details directly into a checkout form on a mobile website or app.
- Mobile Wallets: NFC-enabled mobile devices can store payment info, coupons, and loyalty rewards. Apps like Samsung Pay, Google Pay, and Apple Pay let you pay in stores and online.
- SMS Payments: Customers can pay by sending a text message to a specific number. The amount will then be added to their phone bill after the transaction is processed.
- Mobile Point of Sale (mPOS): Retailers can use a smartphone or tablet as a mobile point of sale system.
- Mobile P2P: Peer-to-peer payment apps like PayPal, Zelle, Venmo, and Cash App make it easy and fast to make payments.
Next, we’ll explore how these mobile payment methods work. Keep reading for more details!
How Mobile Payment Solutions Work
Mobile payment systems work in different ways depending on their type. Here are the main solutions for mobile payments:
- NFC Chips: When customers use an NFC-enabled mobile wallet, they can complete a contactless payment by simply holding their phone, tablet, or smartwatch near a point of sale terminal. The NFC chips in the phone and terminal use radio-frequency identification (RFID) to safely exchange information. This technology makes payments quick and secure, eliminating the need for cash or physical cards. The NFC data transfer is encrypted to protect personal information.
- Network Tokens: Network tokens help businesses avoid handling personal information and reduce security risks. When a person adds a debit or credit card to a mobile wallet or payment app, the network creates a token to replace the card’s primary account number (PAN). This token is used instead of the actual card details during payments. Even if a hacker accesses the token, it is useless without the original card information.
- QR Codes: QR codes are a secure way to exchange encrypted payment information. Scanning a QR code allows for quick and contactless mobile payments. QR codes are easy to use and growing in popularity. In 2022, the global market for QR code payments was about $9.98 billion and is expected to reach around $11.12 billion by the end of 2023.
- Virtual Terminals: Merchants can use an app- or web-based virtual terminal to accept mobile payments. By installing this virtual terminal on their device, they can quickly set up an mPOS system for mobile transactions.
Benefits of Accepting Mobile Payments
Still unsure whether to add mobile payment options to your business? Here are some benefits to help you decide:
- Better Customer Experience: Mobile payments make transactions smoother and faster, leading to happier customers at checkout.
- Convenience: Customers can make quick transactions from anywhere in the world with just a few taps on their phones, as long as they have their device with them.
- High Security and Privacy: Mobile payments often use advanced security features like multi-factor authentication, biometrics, and tokenization to protect data.
- Increased Customer Loyalty: When customers feel their information is secure and have a positive shopping experience, they are more likely to return to your business.
- Simplified Accounting: Mobile payments often integrate with your existing point-of-sale or eCommerce systems, automatically recording transaction details. This reduces manual entry, simplifies reconciliations, and minimizes errors.
- Higher Sales Revenue: Mobile payment usage is growing. For example, NFC payments are expected to reach 1.31 billion users worldwide in 2023, up from 950 million in 2019. Keeping up with this trend can boost your sales revenue.
As mobile payments continue to grow and may even surpass cash transactions in the future, adapting your business to include them can be highly beneficial.
Conclusion
Mobile payment systems are changing the way we handle transactions. They provide a simple, safe, and fast procedure that supersedes the conventional way. In the near future, we will more often adopt the use of mobile payments into our daily activities. Be it the purchase of necessities, transferring funds to others, and online shopping for goods and services, the use of mobile payments will be with us. This technology simplifies the process of purchasing goods and services and taps into the potential of the online market.
