People are already attached to their smartphones for information, communication, and socialization, so it makes sense that they would also consider using them to make payments in person and online. John Rampton, an entrepreneur and investor in the payments industry, noted, “Mobile payments is a natural progression because people never let their phones leave their side but sometimes they do actually forget their wallets or checkbooks. It’s convenient for merchants and business owners because it offers a quick and low-cost way to accept payments.”
1. Enables More Convenient Loyalty Programs
Mobile payment applications enable the ability to offer more incentive and loyalty programs that work better than punch cards or key ring tags. Customers don’t have to worry about forgetting it and remembering what phone number they put their loyalty information under.
Instead, it links to their mobile device and registers each time a payment is made. Customers want to come back to a place that makes it this easy to be loyal, incrementally adding to the revenue for that business.
2. Small, Remote Businesses Can Now Accept Card Payments
If you operated a food truck or worked as a craft vendor, you know it was really impossible to accept a debit or credit card payment. With mobile payments, many of these small business owners are now seeing their sales double and triple in size when previously they could only accept cash payments – something that most people don’t carry much of anymore.
Small businesses in developing countries have actually been able to really see gains in their business as more consumers have smartphones but not necessarily a bank account, so they can use various mobile payment providers that are appearing to help them. In turn, this gives them more buying power and turns them into a whole new segment for businesses to gain additional revenue.
3. More Information about Customers Means Better Experiences
“Being a cash only business means you can’t really collect any data about your customers or align your sales data with available inventory in a way that could enhance future customer experiences,” said Chalmers Brown, CTO of Due, a payments company. With mobile payments, a company can track inventory and customer behavior to better understand things like seasonal demand and changing buying trends.
With this information, the company can then prepare more effectively and create more sales rather than not having the inventory or type of product available when needed. Once service goes up because of this capability, more customers will return and tell others as well, thereby raising revenue.
4. Speedy Transactions Means Happy Customers
Using mobile technology for payments often provides for payment data storage or transactions that are much shorter. When customers get quick service and can finish their transaction quickly through their phone, they are more satisfied than if they have to wait in a long line at the store or take while online to finish their purchase.
If they have a great experience with speedy purchases they are likely to return. The other way to make more sales off of speedy transactions is the fact that you can actually service more customers in the same time period, closing more sales than if you had not had mobile payment technology.
5. Other Ways to Profit from Mobile Payments
Mobile payment technology can also be a better value in terms of lower transaction fees than other types of payment processing, including saving considerably on credit card processing fees. This savings can then benefit your bottom line and incrementally raise your profits over time.
Time Will Tell
While mobile payments are growing in popularity with consumers and businesses, it will still take considerable time for it to become the payment system of choice. What it does offer is another way to make payments in person and online, expanding the payments industry and offering more opportunity for everyone involved.