The tech industry is evolving at a phenomenal pace, showing no signs of slowing down. One such example to demonstrate this advancement is mobile payment technology. Mobile payment technology allows users to make online and in-person transactions to purchase products and services using their smartphones.
Mobile Payments are rapidly gaining prominence around the globe as an increasing number of businesses continue to adopt and integrate the technology into their payment systems. With changing consumer lifestyles and preferences, the widespread use of smartphones, and the ever-increasing growth of e-Commerce, we can only expect this trend to skyrocket over the next few years. So much so that the global mobile payment technology market could reach $5,500 billion by 2026, as per some reports.
Fast, convenient, and secure, it serves as a virtual wallet and offers a more streamlined payment process compared to carrying a wallet full of cash and payment cards. Let’s delve a little deeper into how mobile payment technology works and its benefits to consumers.
What are Mobile Payments?
As mentioned, mobile payments are regulated transactions that you can make through your mobile phone. That means, instead of paying for goods and services with cash, cheques, or physical credit or debit cards, mobile payment technology enables you to do so digitally through a digital wallet stored in your phone.
If you are a business, then setting up a credit card processing app on your smartphone can be a convenient way to accept credit card payments from customers. As mentioned at Helcim, there are various situations where your business can potentially benefit from the flexibility of mobile payments. Instead of investing in an expensive countertop POS system, downloading a credit card processing app can be an affordable way to receive payments for your business while on the go. Not only are mobile payment programs relatively inexpensive, but they also do not require any sophisticated technical knowledge to implement. Consequently, many small businesses have been quick to cash in and adopt the new technology.
How Do Mobile Payments Work?
Taking card payments through a smartphone is a straightforward process. The technology underpinning payments is NFC, an acronym for “near field communication.” The NFC is a subset of the RFID technology, which identifies two things via radio waves.
So, to initiate a transaction, you need to put your mobile divide near an NFC-enabled payment reader first. Both devices will use the RFID technology to communicate wirelessly and exchange encrypted information, which will process the payment. That is how NFC enables users to initiate contactless payments within seconds by simply tapping their phones.
Benefits of Mobile Payment Technology
An increasing number of merchants, regardless of their size or industry, are starting to embrace mobile payments due to their multiple benefits and the enhanced customer experience it provides. Besides allowing you to forgo the hassle of carrying physical payment cards, cash, or checks, mobile payment technology has various other benefits associated with it. The exponential growth can be attributed to several factors as stated below.
Mobile payments are super fast. Counting cash or waiting in line for a chip card transaction takes a bit of extra time. Mobile payments are the fastest way to make a transaction without delay or inconvenience, taking just a second or two. All you need to do is tap, pay, and leave. You pull out your smartphone and place it near the payment processor, which will authenticate and complete the transaction in the blink of an eye.
Using mobile payment technology to complete a transaction has many security advantages that do not come with traditional payment methods.
Digital wallets are highly secure as they have extra layers of dynamic encryption, which keep your transactions and personal data safe from any threats.
When you make a mobile payment, the card number is masked, and a random one-time number or token is assigned with each purchase by the system to hide your details. That boosts the security of your data and reduces the chances of fraud, making mobile payments a highly safe and secure way to make payments.
Making mobile payments using an app or website allows merchants to offer rewards, discounts, or special offers associated with their customer loyalty programs. That can increase customer loyalty and retention rates in the long term, with consumers returning frequently to benefit from rewards. For example, 40% of Starbucks' total sales now come from their rewards program.
Adopting mobile payments can help businesses reduce their expenses and result in significant cost savings over time. Credit card transactions require buying and maintaining a POS system, getting paper for printing receipts, and using separate management tools to keep transaction records. All these little payment processing costs with a credit card and record-keeping can quickly add up and be a bit too much, especially for small businesses.
Implementing mobile payment solutions offers merchants a cost-effective alternative. With a business app and a simple payment reader, merchants can process transactions and manage records all in one place with NFC capabilities.
Mobile payments offer flexibility and ease of use not available with any other payment method. You can leave your bulky wallet at home and use your smartphone to pay for anything you need through apps like Apple Pay, Google Pay, or Android Pay. Not only is there less burden in your pocket, but you also do not run the risk of having your cash lost or stolen. Lastly, paying with your digital wallet by simply tapping your smartphone is often easier and faster than swiping or inserting a card.
The future of mobile payments is bright. The technology revolutionizes how businesses get paid and the convenience, ease of use, and security it offers to consumers to make payments for their products and services. Integrating mobile payment systems will ensure that you are prepared to be at wavelengths with an ever-changing eCommerce industry.
To conclude, adopting mobile payment solutions can make a significant difference for your customer satisfaction and make their everyday life and habits easier, faster, and generally more efficient.
WRITTEN BYDaria Brown