Because of the current economic landscape, industry experts in mobile payments predict that the global number of mobile contactless payment users will see a dramatic increase by the end of 2020. Statistica even reports that numbers may go as high as 760 million before the end of the year, which is a big shift from the 440 million users reported in 2018.
In the U.S. alone, at least three out of five smartphone users have a mobile wallet. With at least 68% of those surveyed saying that they’re more likely to shop at a store that accepts mobile payments and another 57% saying that they would be able to spend more money because of it.
This is important because, up until recently, many retailers have passed on making any serious efforts in accommodating the demands of mobile processing from their consumers. Why is that? And, what’s the big deal with mobile payments anyway?
Learn more about this big shift to mobile payments and how you can get ahead of your competition by accepting mobile payments below:
MOBILE PAYMENTS 101
Mobile Payments are largely known for their efficiency and reliability. All it takes is a single tap and, just like that, all relevant credit card information is sent over to a POS terminal.
However, there are some caveats to this efficiency. For one, the customer must have a device that is capable of making mobile payments. For example, NFC mobile transactions, which use near-field communication (NFC) technology to facilitate payments, require that the device in question is fitted with the necessary hardware to ‘send’ information to a terminal securely.
Fortunately however, incorporating mobile payment processing is relatively easy for merchants, as they have the support of their payment processor, an example of which is the merchant processor Platinum Payment Systems, who can provide them with the necessary technology to accept such payments (amongst other transactions.)
For a more in-depth look at the benefits and disadvantages of mobile payments, continue to our next and final sections, where we break down all that you need to know:
The Pros of Mobile Payments
To begin with, let’s start with the benefits or the ‘pros’ of accepting mobile payments in 2020:
- Efficiency: As mentioned, mobile payments are known to be incredibly efficient. It has come to the point where completely contactless transactions are now possible, which is especially helpful in today’s global landscape.
- Security: Even though the technology involved is new, mobile transactions are incredibly secure. It uses a process called ‘tokenization’ where your credit card information is given an identifier (a token) to be used in conjunction with a security code. This means that, while a hacker can access your token, they will not be able to find your credit card information.
- Flexibility: As a bonus, mobile transactions are especially great for loyalty or reward programs — as reward information can be stored digitally inside a digital wallet rather than on a physical card.
The Cons of Mobile Payments
Just like with most payment methods, mobile transactions have their limits. We’ve already mentioned a couple of the more specific ones. But as for more general limits, you can expect to have to deal with the following:
- Variety: Variety is usually a good thing. However, when you take into consideration all the different methods of mobile payment processing available these days, you’ll find that you couldn’t possibly accept all of them. Or, even if you did, you’ll find that it would be very expensive. The cost of setting up the infrastructure alone might be enough to break the bank, never mind the extra fees attached to it! That is why, in most cases, retailers tend to accept only one or two types of mobile payments.
- Permanent Digital Record: While credit card information is secured during mobile transactions. That doesn’t mean that nothing is being recorded.
- Mobile Phone Compatibility: Certain POS terminals will require that the customer has hardware or software installed on their device that will allow them to connect with the terminal successfully. Which may lead to some complications.
- Physical Limits: While it is definitely convenient to not have to carry around a wallet full of cash and credit cards. If you actually do, you’ll be running the risk of not having access to money at all — in case your phone is lost, stolen, or runs out of battery in the middle of the day.
As you can see, there are still a lot of fatal flaws that need to be addressed before mobile payments could ever be accepted as the one ‘true’ way of paying for goods and services. However, that doesn’t mean that there isn’t a benefit in jumping on the wagon early. Especially as so many consumers globally are eager to jump into the fray.