Mobile payments are becoming a game changer in the world of retail: A recent report predicts that over half of consumers will utilize mobile payments for in-store payments in the next few years. That means that by 2020, 150 million consumers will be using mobile payments like Android and Apple Pay.
So, what does “mobile payment” mean? Mobile payments use NFC (near field communication) technology to complete a contactless payment. With NFC, your smartphone and the payment terminal pass encrypted information back and forth to each other to complete a payment.
As a small business owner wearing many hats and juggling different business priorities, you may think implementing mobile payments shouldn’t rank at the top of your list. Think again. Beyond offering consumers a convenient, secure method of payment, mobile payments can also help grow your customer base, ensure more generous gratuities for your staff, and help your business achieve success on its journey to growth. Here are six ways that accepting mobile payments can help you grow your small business.
Looking for ways to grow beyond your regular customers? A common strategy for small businesses to grow their customer base is to introduce new products and capabilities.
In a recent consumer survey done by Square, consumers who adopted mobile payments cited them as their ideal payment method, referencing speed, convenience, and security as their top reasons for continued usage. As a result, these consumers reported that they actively seek out businesses that support mobile payment technology — so adding mobile payments might be the key to bringing in new customers.
Not only do mobile payment users regularly return to businesses that accept mobile payments, most said they’re likely to spend more once they get there, and be more generous with gratuity, according to the Square survey. Data from the #PayFasterPortland event shows that customers who used their Near Field Communication (NFC) device or a chip card tipped more than customers who used traditional magstripe cards. Perhaps consumers are expressing gratitude for businesses that offer mobile payments, since they provide a safe and fast transaction experience for everyone.
Waiting in slow lines is consumers’ number one frustration with shopping in stores. A key benefit of mobile payments is that they’re fast — far faster than chip cards. To complete a transaction, all customers have to do is hover their phone near the mobile payments reader and voilà — the reader and mobile device will utilize NFC technology to process the transaction quickly, speeding up your checkout line.
With speedy transactions, you’ll have improved customer processing. And while more customers mean more business for you, a speedy line and checkout process make for a much better experience for your customers overall.
An Accenture survey found that 23 percent of millennials use mobile payments at least once a week. And in our survey, 45 percent of those who have adopted the technology are between the ages of 18 and 34. Take note, small businesses: It’s important to provide the payments experience that this generation will soon come to expect.
Protected by cryptograms and sophisticated tokenization methods, mobile payments like Apple and Google Pay are a highly secure form of payment. Consumers can also activate fingerprint technology in most mobile payments solutions — adding another layer of security that protects data on lost or stolen devices. Accepting mobile payments at your business means you’re providing a safe and secure way for customers to pay.
Making the change to a point-of-sale system compatible with mobile payments will ensure you stay relevant, your business stays safe, and sales grow for years to come.
Mallory Russell is the editor in chief of Square’s Town Square blog and resource center. She regularly writes on topics that help entrepreneurs start, run, and grow their businesses.