7 minute read
The benefits of mobile payments as part of your commerce strategy
Friday, January 28, 2022
7 minute read
Editor's note: This article was updated on January 28, 2022, from its original publish date of June 6, 2019.
Integrating mobile payments into your business offers as many benefits to your customers as it does to your commerce. Ease and convenience for your customers; expanded reach and lower transaction costs for you—just to name a few. And you don't want your company to miss out on all the benefits that come along with this growing market. The global mobile payment market is expected to reach $273.1 billion by 2028.
3 types of mobile payments
Mobile payments is a broad term, and within that umbrella, there are three types of mobile payments to consider for your business:
1. First is the technical ability to accept payments via digital wallets from your customers, including, tap to pay at the physical point of sale (POS) or click to pay on your ecommerce website.
2. The second type is an in-app mobile payment. This is where a customer makes a payment through your merchant app from their mobile device.
3. The third type is in-person through a mobile point-of-sale (mPOS). An mPOS typically includes an app on a mobile phone or tablet paired with a mobile card reader.
Determining the best use for your mobile payments strategy can supercharge your growth potential. We'll show you how each type of mobile payment can impact your business.
1. Benefits of digital wallets
Digital wallets like Apple Pay and Google Pay allow your customers to purchase goods and services with their digital devices, including smartphones, smartwatches, computers, or IoT devices. A mobile-first approach to commerce is the new norm for businesses. Capturing sales from as many devices as you can comes with extraordinary benefits.
Reach more customers
Your customers are already using their mobile phones as an extension of themselves, so bringing the retail experience to their digital wallets makes great business sense. With every business sector from micro-merchants to big-box retailers accepting digital wallets at a rapidly growing pace, digital wallet use will continue to accelerate. From 2020 to 2025, Statista predicts digital wallet use will double worldwide.
Fast, convenient, and safe
Today, biometric authentication like facial recognition speeds up transactions. Once the digital wallet is activated, your customers simply hover their mobile devices over your POS to complete a transaction in store in a matter of seconds rather than minutes, saving time and effort for customers and businesses. Plus, digital wallets allow for a safer, no-contact experience for both employees and customers.
When you enable digital wallets on your ecommerce website, you streamline your online checkout process. Customers simply choose a stored payment method in their digital wallet and then click to buy. This feature not only saves customers time but also prevents them from having to manually enter their payment information over and over when online—increasing your chances of conversions.
Enhanced security
Digital wallets are more secure than a card on a traditional POS terminal. When using a digital wallet, the customer's card number never enters the equation. The information taken from the digital wallet during the transaction is not a card number, but a tokenized version of that data, plus a one-time number tailored to the individual sale.
The same process occurs when customers use their digital wallets to make in-app purchases. This process is an important security measure for businesses. According to IBM, the average global cost of a data breach has reached over $4 million. Tokenizing payment information provides an extra layer of protection for your business.
2. In-app mobile payments
In addition to all the benefits of enabling payment by digital wallets mentioned above, providing a mobile app with in-app payment functionality offers additional value to your brand.
Build your brand
Building an exceptional in-app payments experience can help you win and retain customers. Google partnered with research firm Purchased to evaluate the importance of brand building via mobile. It found:
- 89% of people are likely to recommend a brand after a positive brand experience on mobile.
- 2x more brand experiences happen on mobile devices than anywhere else.
- Nearly 9 out of 10 people would buy from the brand in the future if they thought the mobile brand experience was helpful or relevant.
Your branded mobile app is a welcome mat for your business. Businesses that offer a customer-centric mobile experience are benefiting greatly in the name of sales and repeat customers.
Build loyalty
Accepting in-app payments gives you another way to build loyalty with your customers. Increasingly, consumers are moving to the mobile channel to make purchases. By 2025, mobile apps are projected to generate over 613 billion dollars in revenue, and you have the opportunity to encourage these customers to spend their dollars with you by tying in-app purchases to your loyalty programs.
In doing so, there are many enticing offers you can extend to your customers to strengthen their loyalty to your brand. For example, you can encourage them to perform specific actions to receive a special benefit. You can reward them with valuable discounts or incentives. When you get to know their buying behaviors, you can send personalized offers directly to them. Incentives and rewards create stickiness to your brand and you will be rewarded with more engaged customers and increased sales, as a result.
Consider Starbucks as an example of building a successful mobile loyalty program. Starbucks drives purchases through its mobile app and rewards its customers with loyalty points when they use their mobile app to pay. Not only can its customers get loyalty points, but once Starbucks learns their customers' buying patterns, it delivers personalized offers to keep them coming back for more. Consumers are happy to use Starbucks mobile app for purchases because it's convenient and easy to use with mobile ordering and fast checkouts.
3. In-person payments via mobile point of sale
If you're a business owner serving customers on the go, a mobile point of sale (mPOS) allows you to turn your mobile device—including a tablet, watch, or phone—into a POS. If you have a physical location, mPOS can become a handy way to offer pickup or to-go orders—or shorten lines by accepting payment anywhere in your location. If you use an mPOS, your customers will realize a tremendous amount of value when you make paying easier for them.
mPOS technology
The latest technology on mPOS uses near field communication (NFC) so that a customer can wave her NFC-enabled device or card next to a mobile device without needing additional POS hardware. An mPOS may also include a cloud-based portal for reporting and managing users and inventory lists. This solution provides payment efficiency when your business is mobile or you need an extra checkout lane to help you manage lines in-store.
Convenience
An mPOS takes chip-enabled cards, contactless payments, and magstripe forms of payment. It also tracks your cash and check payments. No need to worry about sending an invoice later or ensuring your payment has been applied, an mPOS manages all this data for you.
Data and insights
Using a cloud-based inventory list, you can easily create and update a sales item or goods inventory list through an mPOS. This capability ensures that all product information—from descriptions and pictures to prices, tax, and even barcodes—is kept at your fingertips. This essential data helps you make informed decisions to manage your business.
Mobile payments in all forms give you the opportunity to meet and exceed your customers' needs. In an age where speed, convenience, safety, and security matter most to your customers, mobile payments offer it all. And businesses that partner with the right payment technology company to achieve these results safely, easily, and with a high level of sophistication are able to reach their customers wherever they are. Contact us to expand your mobile payment capabilities or download our ecommerce ebook for additional insight on upgrading your mobile ecommerce experience plus much more.
