Despite all the hype surrounding mobile payments, the industry is still expected to grow 210% in 2016 in the U.S., even with just 52% of North Americans being “extremely aware” of mobile payments, and only 18% using them regularly.
Even more disparagingly, mobile payment platforms, such as Apple Pay and Walmart Pay, haven’t exactly taken the payment world by storm. Apple Pay, for example, was only used by 4.9% of eligible sales.
Why haven’t consumers fully welcomed mobile payments yet?
If consumers are like me, it’s most likely because they have several concerns surrounding mobile payments.
At the top of the list is security. Based on a 2015 ISACA survey of more than 900 cybersecurity professionals, nearly half (47%) stated that mobile payments are not secure. Even worse? An astounding “87% expect to see an increase in mobile payment data breaches over the next 12 months.”
A couple of other concerns are not having a global standard for mobile payments and working with an infrastructure that isn’t willing to change. As Jordan McKee, senior analyst at 451 Research, tells Fortune, “Most mobile wallets today are simply credit card surrogates; they’re a veneer over what already exists. This provides little incentive for merchants to upgrade their infrastructure and for consumers to change entrenched payment behaviors.”
The thing is, if you actually stop worrying, and take advantage of the perks that mobile payments provide, you’ll probably grow fond of them – just like I did.
Mobile Payments Are Good For Business
As a business owner, I’ve quickly noticed that mobile payments have become a great asset for my business. In fact, I can’t imagine thoroughly running a business without a mobile payment platform because of the following reasons.
Conveniently Send and Receive Payments
Whenever I have to invoice a client, I can simply use a mobile app to send out the bill. As long as I’m connected to Wifi, I can send out that invoice whenever and wherever I am. While we’ve been able to do this with gateways like PayPal in the past, there are more options than ever to send or receive money electronically.
For example, by using an app like Blockchain, you can accept or send bitcoin payments to anyone in the world. This helps cut down pricey transaction fees and is relatively secure since it relies on blockchain technology.
Transactions fees aren’t the only where I’m saving a bundle. Businesses can reduce their expenses because they don’t have to purchase any new equipment. Instead of investing in POS terminals, you can use your smartphone to conduct your business.
Since Cisco found that there are more than 7.4 billion connected mobile devices in the world, it shouldn’t be a problem to connect merchants and customers to each other’s smartphones.
Improves Cash Flow
Instead of waiting for credit card to process or for a check to clear, mobile ecash payments can significantly improve cash flow. In most cases, transactions occur under 72 hours. However, as technology continues to advance, we’re able to complete transactions almost immediately.
There are several ways that mobile payments have been able to help boost conversions. For starters, you can meet the demands of your customers during the checkout process. Instead of standing in a line, customers can pay for their items or receive suggested items whenever they’re in proximity to a NFC-enabled terminal.
You can also send customers coupons, discounts, or promotions whenever they approach your storefront through the use of beacons and sensors. Or, you could offer them rewards by joining your loyalty program. If you were using blockchain technology, you could reward your customers in points that could be redeemed at your store or any other participating partners.
Finally, you mobile customers will provide you with a ton of data that identifies their shopping habits and user behavior. With this information, you can learn their shopping preferences like when they frequently shop and what their favorite items to purchase.
More Sales Opportunities
One final park regarding mobile payments is that since everyone brings their smartphones along, you can essentially set-up shop anywhere you want and not worry about customers forgetting their wallets at home.
Whether you’re an eCommerce site, pop-up shop, farmer’s market, or brick-and-mortar retailer, you can expand your sales opportunities since your customers will be able to make a purchase whenever they’re out and about or whenever a specific item is on their mind.
Easier to Track Inventory and Manage Accounting
The final perk for merchants is that they can integrate their inventory and accounting into their phones. For example, you’ll receive notifications whenever inventory is getting low based on sales and tracking.
As for recordkeeping, you’ll be able to monitor cash flow and have immediate access to digital sales or expense receipts. This gives you real-time and accurate accounting information directly onto your phone.
The Advantages of Mobile Payments as a Consumer
Mobile payments just aren’t good for business, they’re also useful in my personal life. In fact, mobile payments have greatly improved my person customer experience. These include
Speeding Up Checkouts
I touched on this briefly before, but mobile payments have greatly sped up the sales process. I don’t know about you, but I can’t stand in line – especially when I have a couple of items and get stuck behind someone with a cart.
And, it’s only gotten worse with EMV implementation. Even though swapping isn’t as secure, waiting in line while the terminal reads the chip is just a waste of time. Mobile payments have completely sped this process up so that I can get back more pressing matters.
Mobile Payments Are Convenient
Remember those days of digging into your pocket or purse looking for loose change? How about the times you were out and about only to realize that you left your wallet at home? Or, have you ever had the dreaded experience of losing or having your wallet stolen?
With mobile payments these are all problems of the past. No more lugging, losing, or forgetting money. It’s all stored in a mobile wallet.
Retailers Are Loyalty Offering Rewards
If you can’t function without your Starbucks coffee, latte, or frappuccino in the morning then you should already know that they offer mobile customers some pretty sweet loyalty rewards, such as earning free drinks or food, early access to new products, and offers on your favorite items. You can earn these points simply by using your Starbucks app to make a purchase – which is also faster than standing in line and paying with cash or card.
As more brands embrace, you’re going to see more reward opportunities just for using your smartphone.
Mobile Payments Offer Solid Security
Yes. Even though there was research that found there could be security breaches, overall mobile payments are secure. This is because they use preventive measures like encryption, biometrics, and, two factor authentication.
Apple Pay, for example, uses fingerprint identity called Touch ID and tokenization to encrypt payment information for each transaction. This is more secure than traditional credit or debit cards.
If your mobile device is lost or stolen, payment information is secure because of the security measures listed above. You can also remotely shutdown your device so that it can’t be hacked into.
P2P Lending is Now a Breeze
Finally, you can lend money to your friends and family with P2P apps like Venmo or Due.
There are also apps like Tilt that collects money from a group . Can you imagine never having that awkward discussion with your friends over who owes who money after getting the bill at a restaurant? It’s a surefire way to keep the peace and maintain your friendships, as opposed ot bickering with each other.