Using a mobile point of sale (POS) or mobile devices like a smartphone or tablet, mobile payments facilitate the acceptance of payments for goods and services from any location. Peer-to-peer (P2P) payment apps, such as Bizum, enable users to send money to friends and family and make payments both in-person and online using mobile payment technologies.

Mobile payments can help with a number of issues, including reducing in-store lines, offering a greater range of payment alternatives, and collecting contactless payments while on the go.

Keep reading to learn more about what mobile payments are, the data behind them, and the importance of using them of utilizing them.

What are Mobile Payments?

Because of their speed, convenience, security, and ease of use, mobile payments are a common method for accepting payments from customers in person.

With mobile payments, you may accept card and mobile wallet payments from nearly any place as long as you have a mobile POS, smartphone, or other mobile device setup with a credit card payment app to collect scan to pay or tap to pay NFC mobile payments.

Next, customers won’t need to show their credit card when making in-store or restaurant payments using contactless NFC mobile wallets like Google Pay or Apple Pay. Also, they can utilize an EMV chip card.

The usage of mobile payments is increasing rapidly. In fact, studies show that:

• According to one survey in Spain, of the 34% of respondents who currently pay with their mobile device, almost seven out of 10 (67%) say they have increased their use since the beginning of the pandemic
• It’s estimated that there will be 1.31 billion mobile payment transaction users worldwide in 2023, up from 950 million users in 2019
• By 2024, the global mobile payment market size is estimated to be 3 trillion USD
• 70% of millennials around the globe enjoy discounts and reward offers as incentives for using mobile payment methods
• 46% of consumers globally say they believe using contactless payment methods like mobile wallets is one of the most important safety measures for stores to follow
• Mobile purchases are also gaining popularity online — according to our recent payment trends report, 60.2% of online purchases from April to August 2022 were mobile

Thanks to stats and trends like these, we can see that mobile payment adoption will continue to increase in the coming years.

8 Importance of Mobile Payments

There are numerous benefits that lend themselves to the global widespread adoption of mobile payments. 

1. Reduce expenses

Opting for mobile payments can help you reduce expenses in a few ways. You don’t need to buy expensive point of sale (POS) equipment or paper and ink due to the ability to email receipts. And because you can use a tablet or smartphone as your mobile point of sale terminal, the only external cost you’ll need to set it up is a card reader.

The cloud-based subscription models that mPOS systems have also generally mean low sign up and monthly maintenance expenses.

2. Improve cash flow

When using mobile payments, customer funds are transferred to your account either instantly or within a few days. 

This means you get money faster and, because customers can pay as long as they have their personal mobile device on hand, you’re more likely to receive payments from customers who prefer paying with their mobile wallets. 

And considering over one-third of mobile wallet users now have three or more mobile wallets like Google Pay and Apple Pay installed on their smartphones, accepting these alternative payment methods is crucial in today’s retail landscape. 

In short, with mobile payments, you increase your chances of getting more money from more customers faster than you would with traditional payment methods.

3. Easily integrate loyalty programs

Since customer information is stored in mobile payment apps, coupons or discounts can quickly and easily be sent out to specific customers to reward repeat purchases.

These loyalty programs can include:

• Points loyalty programs. Customers get points for each transaction and can put them toward discounts or free products.
• Tiered loyalty programs. A certain amount of purchases unlocks a new tier of reward points or discounts once the specified number of purchases has been made. 
• Hybrid loyalty programs. Combine two types of loyalty programs for greater incentives. 

4. Get insights into actionable data

Using a mobile point of sale system means you have instant and secure access to key customer data.

This data can help inform you of your current customers’ purchasing behavior and give you the opportunity to further tailor your products, services, or overall customer journey funnel.

Read Also: Payment Solution Security: How to Protect Your Customers Data

Data types include how frequently customers shop at your business, their average spend, preferred payment methods, and the products they buy the most.

5. Increase customer convenience

By adopting mobile payments for your business, customers can leave their wallets at home and still complete purchases.

Alongside this, adding a minimum of one mPOS to your store can improve the customer experience by making it faster and more flexible. And depending on the mobile POS system, you’ll be able to accept the most popular (and customer-preferred) payment options anywhere in your store or on the go.  

Accepting a wide range of payment options will help you reach more people and see an uptick in customer loyalty long-term. 

6. Keep competitive with more ways to pay

How likely are you to frequent a business if you can’t pay with your go-to payment method? By offering multiple ways for customers to pay via mobile payments, you’re staying ahead of the competition.

When investing in an mPOS system, choose one that can process the following types of frictionless payments:

• Contactless (or EMV chip) credit cards
• Digital wallets like Apple Pay, Google Pay, and Click to Pay 
• QR code payments

Remember: every payment option you offer that a competitor doesn’t, means you’ll have an advantage when it comes to convenience and flexibility.

7. Better payment security

Mobile payment apps use an encrypted or protected code to shield customers’ personal data. This means that customers’ real card numbers are never stored on either their personal device or your mobile payment equipment or software.

Because of this, payment security is increased and your liability is significantly lower. 

8. Simplify bookkeeping

Alongside actionable customer data, using an mPOS system also works to collect the following kinds of information for your business:

• Sales information
• Payment records 
• Inventory updates

All of these benefits act as a bonus to mobile payments’ main upside, which is improving the customer experience and making it easier to accept payments on the go.

7 Reasons to Consider Mobile Payment Technology for Your Business

In any business that takes payments from its customers, accepting mobile payments represents one of the keys to your future growth.

1. Customer Convenience

Almost everyone has a smartphone now. As store and payment apps emerge and grow, this has become an incredibly convenient way to pay for almost anything, from almost anywhere. Offering mobile payments makes your customers’ lives easier, and your business more profitable.

2. Data Encryption

Mobile payment options replace debit and credit card numbers with tokens. This encryption technology means that their cards are never presented during a transaction, reducing the risks of data theft and fraud for you and your customers.

3. Accounting Integration

Mobile payment processing easily integrates with your accounting software platforms. This saves you time and money in transferring information across systems. Even more, it reduces the opportunity for human error to come into play.

4. Smoother Cash Flow

Mobile payments get processed in real-time. Instead of waiting for batch processing or clearing of other payments, this gives you immediate access to funds coming in. In a world where the efficiency of your cash flow matters more all the time, this can be a game-changer for your business.

5. Better Customer Experience

More payment options create happier customers. Enabling mobile payments lets your customers shop from home, in the parking lot, or at the point of sale. When you give that level of choice, you leave positive impressions for your customers.

6. Stronger Customer Connection

Mobile payments also deliver customer data to your business. This gives you the ability to maintain their contact information and conduct targeted follow-ups and marketing outreach. The data connection to your customers helps you serve them and your business more efficiently and effectively.

7. Keep Up With Fintech

Mobile payment technology is part of a larger boom in financial technology available to businesses. If you fall behind on mobile payments, you lose ground and competitive positioning against rival businesses that keep up with payment trends. Keeping up with fintech now means you don’t have to try to catch up later.

Mobile payment technology makes payments more convenient and more effective for businesses and customers alike. Working with a payment technology provider that helps enable mobile payments is a critical part of helping your business keep up and grow into the future. Make sure your business is ready not only for the present expectation of mobile payments but for a future that will continue to depend even more heavily on your available financial technology.

What are Some Challenges With Mobile Payment Solutions?

Despite the many benefits of mobile payments, no technology is without its downsides.

1. Slow user adoption

Some customers might be reluctant to switch from traditional payments like cash to mobile payments.

But in reality, this applies to only a small number of consumers. One-third of customers who prefer paying through mobile QR code payments have stated they would not complete a purchase at a business where that option was not available.

2. Some security concerns

While tokenization and biometrics keep the majority of customer information safe, the potential for hacking or data leaks exists for all types of payment methods.

You can add further protection by investing in an mPOS or mobile payment software that has an emphasis on security and responsive customer support should any hacking or data leaks occur.

3. Lack of technology and infrastructure in developing countries

Although the United States, Europe, Spain, and other developed areas see little-to-no difficulty onboarding mobile payments thanks to their strong WiFi connectivity and technology resources, developing countries may find the necessary near field technology too costly and unreliable to integrate.

4. No one-size-fits-all option

When you’re looking for mobile payment processing services, you’ll need to comb through the available options to see which best fits your specific business needs and payment goals.

Features you should look for include:

• A high level of security 
• Fast transaction times
• Both online and offline compatibility 
• An intuitive interface
• Responsive support options
• Low monthly maintenance or subscription fees
• Dynamic pricing 

5. Understanding the terms and conditions

Pages upon pages of terms and conditions can be difficult to fully comprehend, especially if you’re new to the world of mobile payments.

You’ll want to pay close attention to the fine print when it comes to transaction and platform usage fees. For example, some processors charge one fee for swipe or scan transactions and a different fee for transactions entered manually.  

Now that you’re familiar with what mobile payments are and how they can benefit your business, it’s time to start enjoying their many advantages.