The introduction of mobile wallets transforms smartphones and other devices into a secure and convenient payment tool. Fuelled by the on-going pandemic, mobile payments are quickly dominating the market with more and more small, medium to big businesses implementing it for safety, convenience, and efficiency.
Businesses that have successfully integrated, localized, and personalized mobile payments into their payments infrastructure have been proven to gain a competitive advantage over their competitors.
If you are a brick-and-mortar business trying to understand more about mobile payments, here we walk you through a few key things that will give you a better understanding of the topic:
Mobile payments are digital cash transactions that are facilitated by mobile apps that store credit, debit cards, or other banking details to enable payments to be deducted from the customer’s account into the merchant’s account. Mobile wallets store the sensitive card data securely using tokenization, ensuring increased payment security for both the customer and the merchant
To use a mobile wallet, a user can download a mobile wallet app on their device and then add their card or other payment details to the mobile wallet. Merchants on the other hand will commonly integrate the mobile payment into their POS device or choose a POS device that provides the technology to accept mobile payments.
There are many ways in which mobile payments are carried out and processed. The user can either bring his phone close to the point-of-sale device (POS) that must be enabled with a Near Field Communication (NFC) or Magnetic Secure Transmission (MST) technology, or scan a QR code.
To process a payment, the mobile payment app and the POS system exchange encrypted information in a matter of seconds. At this point, the consumer is prompted to authenticate the transaction. The transaction is then authorized and takes a few hours up to a few working days to be reflected in the merchant’s account.
Mobile payments refer to any transaction performed with a mobile device. Mobile wallets and NFC payments are the most widely known mobile payment methods. In addition, there are many more different types of mobile payments such as:
Types of Payment |
How it Works |
Benefits |
NFC Payments Apple Pay, Google Pay eWallets, tap-to-pay credit, and debit cards |
Near-field communication (NFC) technology is similar to radio-frequency identification (RFID) technology, but is limited to sharing data with other devices that are within about four inches. It exchanges data between readers to enable the payments to be processed. |
It is encrypted, highly secure, and promotes a speedy checkout process |
MST payments Samsung Pay, any credit or debit cards |
MST payments generate "magnetic" signals to establish a connection between the user's mobile device and the POS terminal. |
MST technology can work with most NFC-ready POS terminals that accept contactless payments.
|
Sound waves-based payments Alipay, ICICI Pocket, YES Bank, Card Payments and more |
Transactions are processed through unique sound waves containing encrypted payment data. The terminal sends sound waves to the mobile device then the user's phone converts that data into analog signals that complete the transaction. |
The sound-based payment technology is known for being secure as it uses tokenization among other encryption methods, as well as authentication through PIN / Password or biometrics. It is inexpensive to deploy and doesn't rely on the internet to operate. |
QR code payments Maybank QRPay, FavePay, GrabPay, Boost, TNG eWallet, SGQR, SingtelDash, DuitNow and many more |
When a QR code is scanned, the horizontal and vertical patterns of the matrix are decoded by the software on the user's smartphone or the merchant’s device. They are then converted into a string of characters. After the information is processed, the phone may open a browser link, confirm payment information and verify geolocation, among other operations. |
QR scanning enables instant payment and eliminates any need for cards or payment terminals as it only requires a mobile device such as a smartphone or tablet. |
Mobile bank transfers Maybank2U, RHB Mobile Banking, OCBC SG Mobile Banking, DBS Digibank, UOB Mighty and many more |
Mobile transfers allow customers to remotely conduct financial transactions using a mobile device. |
Enables customers to carry out any financial transactions from their mobile bank app and usually, payments will be instantly reflected in the merchant’s account with minimum to zero charges. |
The myriad of advantages that comes with accepting mobile payments is just incomparable to cash transactions. According to experts, cash-only businesses that began to accept mobile payment programs see an instant increase in sales and their customer base.
Implementing mobile payments also serve as an opportunity to stay relevant to the current trend of the market. Businesses that move to include mobile payments in their operation will attract interest and generate customer loyalty as many of these mobile payments offer their own customer loyalty programs and rewards. With that said, here are a few key benefits related to mobile payments:
While you may be intrigued by the list of benefits that mobile payments have to offer to your business, let’s not put aside the disadvantages that come with accepting mobile payments. Although many customers have been shifting more towards cashless payments, there are a certain number of customers still preferring the traditional payment method over cashless- especially the older generation. Aside from that, here are a few more disadvantages of mobile payments:
Now that you’ve come to the point where you understand more about mobile payments, here comes the important question that you were trying to answer. ‘How can I accept mobile payments?’
Accepting mobile payments starts with the equipment that will allow you to integrate cashless in your POS system.
The equipment
Most POS terminals are ready to accept mobile payments with little configuration, that’s why you need to choose a payment service provider that gives you a variety of options for payment acceptance.
The technology
Encryption and tokenization are solutions that will be already working in the background to help protect your business against fraud.
A payment service provider.
Your card processor and merchant service provider can work with you to help you implement a mobile payments strategy that will help maximize your revenue and increase your sales.
With that in mind, if you’re looking for a payment method that can help you consolidate multiple payments in one platform, a payment aggregator such as Fave offers you the benefits of accepting multiple cashless payment methods including card payments, and e-wallets while helping you increase your brand exposure through millions of its active users. Find out more about how you can grow your business by accepting mobile payments through FavePay here.
Mobile payments have revolutionized the way to accept payments. With the rise of mobile usage, every merchant needs to leverage their business with this trend by providing an enjoyable experience, where the customer can easily checkout and pay for their purchase using their mobile phones.