Mobile payments are described as any payments that are made through mobile devices. With smartphones at an all-time high, there are several convenient ways through which consumers can pay using their phones.
When you think of mobile payments, the first applications one usually thinks of is either Apple Pay or Google Pay. However, contactless phone payments aren’t just limited to these as there are many more kinds of mobile payments for face-to-face and remote payments both.
Types of mobile payments
Typically, mobile payments include the following:
Online wallets
Digital services such as Amazon Payments, PayPal, and Google Wallet now have smartphone options. All you need to do is register, enter your phone number, receive the PIN through SMS, enter it, enter the credit card information, or any other payment type to confirm the payment.
QR code payments
QR Codes have squared barcodes that were designed to contain important information in the bar code.
Near-field communication payments
In this payment method, NFC phones interact with NFC-enabled card machines that use close-proximity radio frequency identification. Your mobile phone doesn’t have to physically touch the POS to transfer money, but the devices need to be within some inches of the terminal.
Payment links
Like internet payments, payment links involve sending links on an email, text message, or a messaging app. When the link is pressed, the customer is redirected to a checkout page on the internet browser, where the receiver can enter their payment information.
Pros and Cons of mobile payments
Pros
Mobile payments offer many advantages to their users. These are:
- Mobile payments are an extremely convenient way to make payments, and customers no longer have to carry around a wallet full of cards and cash. Additionally, they don’t have to sign receipts or enter their pins anymore, either.
- NFC technology is equipped with data encryption that protects sensitive information during transmission, thereby reducing hackers’ probability of gaining access to customer information.
- Mobile payments are secure, and customers don’t have to worry about fraud. In contactless payments, devices don’t even have to come in contact with a device.
- Contactless payments are quick, accurate, and secure, and you don’t have to worry about any typos while entering your pin.
- Mobile payments are more time and cost-efficient since tapping is much faster than other payment methods.
- Mobile payments are available on various mediums, such as vehicles, smartphones, key fobs, and other mobile systems.
- Your customers can track rewards and loyalty points during their purchases. Some banks also offer cashback options when you use e-payments.
Cons
- Even though mobile payments are growing at a fast pace, unfortunately, not all merchants and retailers accept mobile payments.
- Even when stores accept digital payments, they may not allow the one your customers use because there are a lot of options available for them to use.
- Digital payments are recorded, which raises concerns regarding privacy. Since every mobile payment is tracked, hackers may be able to access them in case of a breach.
- Mobile payments use NFC technology to transmit transaction data. Not all phones are equipped with this technology.
- Payments are linked to phones, so if a phone is stolen or lost, or even if the phone runs out of battery, you won’t be able to make payments.
Conclusion
Mobile payments are the future, and even if they’re not as widespread today, they’re definitely gaining traction at a rapid pace. They add a degree of convenience that was previously not possible, making them a popular option today. From a business perspective, it’s essential to keep up with such innovations to maximize convenience for your customers.
