Be it barter exchange, gold coins, currency notes, plastic cards and the very latest Mobile Payment phenomena, it would not be an exaggeration to say that we are on the threshold of payment evolution. Mobile payment (aka mobile money or mobile wallet) refers to payment made by customers from their mobile phone for products and services (of course under financial regulations) instead of cash, check, or credit card.
While mobile payments have been a runaway hit with the Net Generation who are becoming increasingly comfortable with making payments or purchases directly from their mobile devices, it still has slow adoption rates among the non-millennial generation. However, the scenario is bound to change with increased security in mobile transactions, easy of use, and convenience.
Mobile Payments: Hype or Reality?
According to a recent IDC report, mobile payments are likely to exceed $1 trillion in worldwide volume by 2017. It is a now becoming a familiar site to see customers simply holding mobile phones high to pay for utilities or ordering a cup of coffee instead of pulling out plastic cards or dollar bills. With such phenomenal adoption rate predicted by trade pundits, enterprises will have to gear themselves to support mobile payments in the future.
Early adoption of mobile payment technology will set you apart from the pack. Don’t be an organization that just uses primitive technologies. Remember a pioneering technology is a great way to improve your branding efforts.
- Easy and Hassle Free: Small businesses and start ups have been rather quick to adopt the new technology to get maximum business advantage. Mobile payment programs are less expensive and donât require investments worth thousands and thousands of dollars. You don’t have to be a technical geek to implement mobile payment programs.
- Increase Revenue: Many businesses lost out on potential sale as they were unable to accept credit card payments. As a result, customers without enough cash were unable to make payment. By implementing mobile payment program, small businesses dramatically increased their revenue and customer base as they were no longer a cash only business but started accepting credit cards.
- Less Transaction Fees: I am sure that you are not aware mobile payment companies charge less than credit card companies per transaction. For instance, Square charges 2.75% per transaction or one flat monthly rate of $275.
- Listen to and learn from customer behavior: Mobile payments often come to the rescue of small businesses struggling to track customer behavior. It allows you to systematically analyze the change in customer behavior, fluctuations, or trends that might help you in improving sales, as well as taking customer service to the next level. You can continuously assess customer’s shopping and usage pattern by leveraging the data captured through analysis tools.
- Anytime, anywhere payment with smartphone: Mobile payment makes life less complicated for customers. It is considerably quicker to pay with a mobile device in comparison to credit card. In addition, customers have direct access to special offers and discounts and the ability to pay with their smartphone.
- Ubiquitous experience: Smartphone allows consumer to research products and compare prices. With social networking, consumers can share favorite products with followers/friends and receive promotional offers such as digital coupons.
Mobile Payments: The Road Ahead
Players like Square, PayPal and Intuit, mobile payment adoption started the ball rolling by targeting small merchants who were looking for relatively simpler credit card processing or less expensive point-of-sale transaction. After tasting success with small businesses, mobile payment technology is now moving to larger organizations. The real challenge ahead is to provide cutting-edge point-of-sale options that could match with the sheer volume and transactions typically associated with large merchants. Such organizations need sophisticated mobile payment solutions that will seamlessly integrate with point-of-sale systems and not merely process payment transactions. Mobile payment start up Square inked a deal with Seattle-based Starbucks to process the coffee giant’s credit and debit transactions. PayPal and accounting software provider Intuit have also created payment apps.
But There Is Always A Cache
As with any new technology or platform comes concerns. Is this technology secure? Does it comply with safety regulations? Who is accountable in case of fraud? The list goes on. One of the most serious problems grappling the mobile payment industry is the lack of information about risks involved and preventive measures adopted. Many mobile payment companies provide little human contact and rely on mundane online help center (even during crisis). It is very important for customers to verify credentials of the app in terms of security and not just user-friendliness.
Companies have realized the fact that significant transactions can be made by effortless purchasing of products and services with a smartphone. However, it is important that customer is informed about the various mobile payment options available. The onus lies on the company to educate customer about technology adoption and eliminate confusion. Think customer satisfaction and bottom-line results which starts with the shopping process and ends with payment. Don’t just push customers to buy, rather provide complete ownership that will improve mobile payment adoption rates.