Pocket Payments: How To Find The Right Mobile Payment System For Your Business

Business.com / Financial Solutions / Last Modified: February 22, 2017

Make sure the mobile payment system you choose to adopt is a good fit for your business and its customers. Here's what to consider first.

Mobile payments can improve your cash flow and payment operations, and require little more than the smartphone or tablet device you own. 

However, mobile payment systems vary greatly in their features, benefits and fees.

The result? 

Not all mobile payment systems are the ideal fit for your business. 

Here are simple ways to use insight from your business (and the one you hope to build) to find the right mobile payment system.

Related Article: Show Me the (Mobile) Money: How Mobile Payments Will Change Your Business

List the Features You Need Now

There are many mobile payment providers, but all aren't designed for the same kind or size of business. Make a list of your “must-haves” before searching for a mobile payment system. 

These questions can inspire your list of priorities for a mobile payment system:

  • Do I want a mobile payment system that allows customers to pay from a website and a mobile device? 
  • Might I use a mobile payment system to manage customer promotions?
  • What kind of mobile device will I use to process payment transactions?
  • How many people on my team will I authorize to accept mobile payments?
  • How many mobile payment transactions will I process a month? 
  • What average transaction value do I anticipate for customers who use mobile payments?
  • Will I commit to a contract if it lowers my per-transaction fee?
  • How soon do I need to have access to approved transaction funds? 
  • Do I want to receive payment for transactions I process via check, direct deposit/ACH transfer or prepaid debit card?
  • Do I have a loyalty rewards program to incorporate into the mobile payment system?
  • How much technical support do I need from a mobile payment provider?
  • Do I sell in more than one currency?

Determine Your Budget

Mobile payment systems are affordable, but they include costs: fee structures, equipment and the terms and conditions associated with the mobile payment service vary by provider. To estimate how much a mobile payment system will cost, try to understand how the fees correlate to your specific business model. 

Start by forecasting the number of mobile payment transactions you expect to process per month. Estimate your average expected mobile payment transaction amount. Consider how you anticipate customers will pay (online, in person, with a card or without). With these figures, you can calculate about how much you can expect to pay for a service — based on your sales and each provider's fees. 

To budget for mobile payment equipment costs, consider where you'll sell and how mobile transactions will be processed.  To swipe a card in a mobile payment transaction, you'll place a dongle into the headphone jack of a mobile device. Though swiping can be faster and less expensive than manually entering card numbers, not all providers offer them free of charge.  

Whether such costs impact your choice of provider depends on how many people on your team will accept mobile payments, and what that means to your budget. Remember that you may also need to invest in Europay, MasterCard and Visa (EMV) compatible mobile payment terminals to accommodate smart cards. Some providers offer them free, though per-transaction rates may be higher.

Read the fine print for each provider. Some mobile providers charge higher fees for specific transaction types. Card numbers that are manually keyed, card-not-present transactions and returns may incur additional fees. 

Related Article: Don't Believe Everything You Hear: Myths About Mobile Payments

Confirm Security of the Mobile Payment Provider Before You Commit

Not all mobile payment providers guarantee the same level of support and security, but it’s particularly critical if you’re a lean small business, one man shop; or simply lack full-time, expert IT support. Any mobile payment provider on your “short list” should guarantee Payment Card Industry (PCI) compliance by adhering to security standards.

The set of security standards are updated frequently as new vulnerabilities in the mass payment system occur. In short, they protect your customers and business from fraud, and to some extent, liability associated with it. Research how the mobile payment provider verifies transactions, how it notifies your business of threats, and how it keeps data safe. If you sell during nontraditional hours, you'll want a provider that offers 24/7 live support. 

The “best” mobile payment system isn’t defined by the most popular brand or the lowest price.  Evaluate your options based on what you hope to get out of a system based on the potential benefits to your business and its customers. 

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