Your smartphone is your best friend, and it's about to make you more money. But first—what do you need in a mobile payment system?
Smart phones have basically become appendages on our bodies at this point—there is very little we do without them, and the list of capabilities just keeps getting longer.
Though mobile payments aren't exactly new, they're becoming more and more common place. People are using their mobile devices to shop—and more than you think. According to Mobile Commerce Press, a survey by Retale found that 56% of consumers are willing to use their mobile device to pay for products" and that "91% of respondents noted that they had already made a mobile payment in order to purchase a product."
Integrating mobile payments into your business model can reduce overhead, increase checkout process efficiency, and even improve your cash flow.
Yet, with so many mobile payment systems now available, the biggest hurdle isn’t whether to accept mobile payments — but how to begin. Here are a few tips to simplify the process of choosing the best mobile payment system for your business needs:
Make a list of “must haves”
There are many mobile payment providers, but they aren’t all equipped or intended to deliver the same types of services. Define how you’ll use them in the system to support your operations, including where, and for whom.
If you intend to use mobile payments only to process credit or debit card payments on a smartphone, for example, your needs may be served with a basic mobile payment merchant account.
If your business stocks inventory, however, you may want a mobile payment system that allows you to accept customer payment and handle certain inventory management functions, like purchase order issuance, stock counts and replenishment.
Some mobile payment systems are designed to support customer loyalty and rewards programs, and others serve specific niches, like restaurants and retail environments. Outline how the ideal mobile payment system could support your business. Use your list of “must haves” to compare the many options that are available.
Determine your budget
Though mobile payment systems tend to be more affordable than traditional point of sale systems, they do have costs. Fee structures, required equipment, and the terms and conditions associated with the mobile payment service vary by provider. Read the fine print associated with fees and system capabilities to ensure the mobile payment provider you consider is appropriate to how your business functions.
For example, some mobile payment providers offer low transaction rates, but require service contracts. Others may charge different fees based on transaction volume, and transaction type. For example, because “card not present” transactions present more risk, mobile payment processing fees may be higher for transactions that are keyed in, versus “swiped” through a mobile payment system’s device.
Some mobile payment providers are designed to facilitate global transactions and various currencies, while others accommodate specific regions of the world.
Though there are many cost-efficient mobile payment providers designed specifically for small-business budgets, choosing the most appropriate system based on your specific needs will help you realize the best potential return on investment from your mobile payment system.
Understand the important provider services
The mobile payment industry has become increasingly popular as businesses and customers have grown accustomed to using mobile devices to communicate, find and manage information, and pay. However, not all mobile payment providers guarantee the same level of support and security that is critical to protecting your business.
Confirm that the payment provider’s guarantee transactions are processed under the most current iteration of Payment Card Industry security standards (usually referred to as “PCI compliance”). Though PCI compliance is not “law”, it protects merchants who handle sensitive customer data and financial information, and their customers.
Without the support of a PCI compliant payment processor, your business must stay abreast of PCI security standards (which update and evolve frequently). If a security breach occurred and you were not PCI compliant, your business could be subject to costly lawsuits, fines and loss of customer trust.
Consider the hours the payment processor guarantees access to a live support team. If you intend to use mobile payments to sell on the weekends and your system stops functioning, that real-time support could mean the difference between lost sales, or a profitable business day.
Choosing the “best” mobile payment system isn’t defined by the most popular brand, or the lowest price; it’s determined by how appropriately the system meets your unique business needs. Evaluate your options based on what you hope to get out of a system, and at what cost, based on the potential business benefit. From that place, you can identify the “short list” of potential mobile payment providers that will eventually lead you to the perfect fit.
Image via Mastercard.