By Ryan Ayers
How often do you carry cash around these days? Do chip cards irritate you by increasing your transaction times? Wouldn’t it be easier to just carry your phone and leave your wallet at home? Many Americans are beginning to switch from more traditional methods of payment in favor of convenient mobile payment options. In 2015, $214 billion was spent in mobile payments, and that number is growing steadily each year, proving that companies should be paying attention to customer’s new payment preferences. You may not think that revamping your payment options is a priority for your production company, but it’s something you may want to consider for these five reasons.
Mobile Payment Technologies on the Rise
Before we get into why accepting mobile payment technology can benefit companies, let’s take a look at some of the different options available.
Apps & Mobile Wallets
Accessed via smartphone, some apps allow customers to draw directly from their bank accounts or credit cards to make purchases. Some mobile wallets allow users to store money directly within the wallet for easy transfers. Some of the most popular mobile wallets include Apple Pay and Samsung Pay, and they’re used by tapping the app on an NFC (near field communication) device provided by the merchant.
A new player in the field of payment, cryptocurrency is still in its infancy. Bitcoin, the most popular cryptocurrency, has gained a lot of value in the last few years, and has at times surpassed the value of gold. Bitcoin is operated off of a “blockchain” (distributed ledger system) that makes payments secure, and involves no governments or banking institutions.
Mobile Card Readers
Though not strictly a mobile payment option, mobile card readers like Square allow for a portable POS system for swiping cards. Many merchants use these readers at festivals or other on-the- go events, as they can be simply plugged into a smartphone and used immediately.
1. Mobile Payments Provide Data Security
While many people have the perception that credit cards are more secure than mobile payments, this just isn’t true. Fraud is a big problem for businesses of all sizes, and 63% of small businesses in one survey said they had been exposed to some kind of credit card fraud in the past. Credit card fraud can damage a company’s bottom line and reputation, which is why it’s important for companies to choose the most secure options possible.
NFC chip cards have been a big step forward in credit card security—the UK has seen a 32.5% decrease in fraud since implementing the technology—but mobile payments have several layers of security which make them a great payment option for preventing fraud. In the future, bio-metrics like fingerprints could make the process even more secure.
2. Reach Younger Audiences
The number of people using mobile payments increases with every generation—and the younger generations are now beginning to harness much of the world’s spending power. According to a GFK study, 53% of US consumers from 18-24 have used a mobile payment in the last six months, compared to 37% for ages 25-34 and 27% for ages 35-49. Offering these different payment options is a great way to appeal to younger audiences, which are eager to leverage these new technologies.
Young consumers are also getting in on bitcoin, which is expected to grow to 5 million users by 2019. Bitcoin is especially popular for transfers and transactions between countries, since the transactions are secure and decentralized.
3. Easy Secure Transfers
Moving money around can get complicated and expensive. Instead of writing a trick, using cash, or another method of transfer, mobile devices offer an easy, secure way to transfer money. All that is needed is a compatible payment app (both people must have the app) and a linked credit card or bank account. Then, it’s easy to transfer money between people (sometimes there is a fee for this service, but it is usually small).
4. Gain Insights Into Customer Behavior
When mobile payments are used, there is an increased opportunity for data collection. This data can be leveraged to increased sales by gaining insight into customer behavior. When, how, and what was purchased can help companies decide which promotions to offer, and what services are the most popular. This data becomes extremely valuable when it comes time to make plans for the future. This is beneficial for companies, but it also helps improve the overall user experience.
5. Decrease Costs
Transaction costs are always a concern for businesses. While fees vary depending on the service used, the transaction costs for sales and transfers can be lower when using mobile payments. That in itself is a great incentive for businesses to jump on the mobile payment bandwagon—it’s only going to get more crowded as time goes on.
About the WriterRyan Ayers has been a consultant for over five years within multiple industries including information technology, medical devices and logistics. Many clients call him the BizTech Guru. He is a freelance writer on the side and lover of all things related to business, technology, innovation and the LA Clippers.