Businesses of all shapes and sizes are increasingly accepting mobile payments, turning smartphones and tablet devices into point of sale terminals. But why? Here’s a look at four benefits mobile payments offer — and whether the technology could prove beneficial to your business.
Reduce expenses and leverage existing equipment. A report by Cisco reveals that as of 2014, there were 7.4 billion connected mobile devices in the world; smartphones account for 88 percent of that ownership. Given that there are now more smartphones in the world than there are people, there’s a good chance that you and your staff already own the equipment needed to evolve your checkout processes into roving point of sale terminals (provided you’ve opened a merchant account with a reputable payment processor). Not only do mobile payments eliminate the need to invest in pricey point of sale terminal equipment — receipts can be provided to the customer via email or text message, too. If you occasionally take your business on the road, you can securely process mobile payments directly from your mobile device, using the payment processor’s secure app, or a dongle, which plugs into the headphone jack of a mobile device for card swipe transactions.
Enjoy a mutually beneficial cash flow benefit. Incorporating mobile payments into a business model offers cash flow benefits to both customers and merchants. By accepting mobile payments, customers have the flexibility to pay with a credit or debit card — a preference that is becoming popular over cash, according to Javelin Strategy & Research. For business owners, mobile payments can also expedite the process of turning customer sales into the liquid cash flow that’s required to support financial stability. Most mobile payment processors transfer funds electronically to a business bank account within 72 hours of transaction approval; less the nominal fees that apply for each mobile transaction (usually about 1 to 3 percent of the transaction amount).
Improve customer conversion. Regardless of what you sell or the unique attributes of your customer base, consumers are continually demanding in terms of what they expect from a business to have a positive experience. With mobile payments, you can keep pace with such demands by “meeting” the customer at the exact moment he or she is ready to purchase — literally, and figuratively. In a brick and mortar sales environment, for example, three consumers may have three different purchase needs. One may be ready to buy as soon as the product is found on your shelf, another may be ready to buy outside of the dressing room, while another may wish to pay on the way out. Regardless of how many staff your business employs, mobile payments empower you to accommodate customer’s specific needs and expectations. Ultimately, such accommodation can lead to a competitive advantage, simply by eliminating the traditional checkout line. For example, researchers from Duke University and Columbia Business School found that “customers react much more to the length of the line, than to the number of employees working behind the counter.” Mobile payments concur that sales are challenged head on, by eliminating traditional lines. Likewise, mobile payments empower you to eliminate unnecessary waste in traditional invoicing processes with vendors. Unlike a hard copy-based invoicing system that involves hard costs and time delays, mobile payments equip you to process accounts receivables as soon as transactions are deemed complete and ready to bill.
Complement the preferences of a mobile dependent customer. AdWeek reports that nearly 80 percent of consumers ages 18 to 44 carry their mobile devices with them for 22 hours a day. With such co-dependence comes evolved usage and integration into daily life, including making purchases. Gartner Research predicts mobile payments will gain popularity from now until 2017, with adoption rising at a yearly rate of about 35 percent. Ultimately, the research group forecasts that mobile payment transaction volume will be more than $72 billion by 2017.