If you are an artist, then you probably spend most of your time trying to create works of art. To earn a living, you would need to sell the products you create. You may come across many customers who are not ready to pay by cash and instead would like to know if you accept mobile payment. It is not just artists, even small businesses face this situation, where customers would wish to pay through their mobile phones. Mobile phones or smartphones have become very popular today.
More than 50% mobile users use their mobile phones to access the internet. They are comfortable using their phones for various activities, including making payments. Accepting payments by checks is a risk, which is why most businesses prefer to accept payment through credit cards. Small businesses and individuals like artists may not have the equipment to accept credit card payment. Accepting mobile payment is easy and a small business can offer this facility to customers to receive instant payment.
If you are an artist, an individual offering a service, or a small business then you can consider allowing customers to pay through their mobile phones. This will make purchasing from you convenient for your customers. Accepting payments from a mobile phone is also very easy for you to implement. If you did not know how this could be done, we will explain the same in this guide.
What is mobile payment?
Mobile payment is nothing but payment done by one person to another using the mobile phone. The use of mobile phones for payment commenced in 2009. A company named Square introduced a feature where a mobile phone could be used to read credit cards. This was a good way to use a smartphone to accept payments through credit cards. Subsequently, an innovation came in the form of mobile wallets that could be used for mobile payment.
A mobile wallet is a virtual wallet. Just as you hold cash in your purse or wallet, you can hold cash in a virtual wallet that can be accessed from your mobile phone through an app. You can use this wallet app to make payments to anyone. The payment would be transferred instantly from your wallet to the other person’s wallet. You can link the mobile wallet to your bank account so that you can transfer money from the wallet to your account or vice-versa.
The first wallet was introduced by Google in 2011, they called it Google Wallet. PayPal one of the leaders in online payment introduced their mobile wallet in 2012. Apple came out with ApplePay, a mobile wallet in 2014. This was an innovative solution as it allowed for the use of NFC (Near Field Communication) technology to make payments. It also had biometric authentication to avoid potential misuse. Subsequently, in 2015 Google replaced Google Wallet with Android Pay (subsequently renamed as G Pay).
It is estimated that by 2022, payment transactions through mobile phones would reach $14 trillion. This facility is being fast accepted worldwide. It makes sense for businesses, including small businesses to start accepting payment through mobile phones. Not doing so can make things inconvenient for customers. Apple Pay is used by 250 million users worldwide. We Chat pay is used by 600 million users. If you do not accept mobile payments, you can lose out on potential business. It is time for you to get started now.
Benefits of accepting mobile payments
A small business has many advantages when they start accepting payments through mobile phones. Here are a few of them:
1) It is what customers want
Today, we live in a competitive world, where the customer is the king. A business needs to quickly adapt itself to changing trends. Customers find mobile payment convenient. People use their mobiles throughout the day. In fact, many people do much of their computing through the mobile. Youngsters use mobile phones extensively. In such a situation, making payments through mobile phones is convenient and customers are willing to do this. In fact, this is gradually becoming the first choice for making payments, rather than cash and card.
If you offer mobile payment, then you are making things convenient for customers. Customers nowadays don’t carry much cash. Governments across the world are discouraging people from using cash and motivating them to shift to cashless forms of transactions. The mobile payment facility is fast becoming a popular payment option. Very soon, it would become the preferred choice for payment and a business would have no option but to offer mobile payments. It is better that you start accepting payments through mobile right now.
2) It is convenient for you
It is not just customer convenience, payment through mobile phones is convenient for you too. If you plan to accept payments through card, then you need to sign up with a provider. You need to get a machine to read cards. You and your staff need to learn how to use this. Mobile payments, on the other hand, are very simple. There is no equipment needed (unless NFC payments need to be used). All you need is a smartphone. You can install the mobile wallet or mobile payment app. These apps are free and are simple to use. Accepting payment through mobiles is easy for you to implement.
3) You can be paid fast
When you accept a credit card payment, you don’t get the payment immediately. It takes time for the bank to process it and then transfer it to your account. You would need to monitor every transaction to ensure the money has reached your account. There is also a risk of credit card fraud, which can result in delays in getting payment. Payment through checks are even more cumbersome, you need to go to the bank and deposit it and wait for the payment to be cleared.
Mobile payments are extremely convenient as the money transfer happens instantaneously. There is no processing or waiting time. The moment the customer makes the transaction on his mobile phone, the payment would be transferred to your wallet or account. It makes sense to start accepting mobile payments since you can get your money immediately.
4) It can help in increased sales
There could be customers who don’t buy from you or use your services because the payment methods you offer are not convenient. When you offer mobile payments, you are making things convenient for customers. You can look forward to increased sales from customers who prefer paying through mobile payment apps.
5) It is highly secure
Payment through credit card involves many risks. The customer may need to key in a password/pin to complete the transaction. The process takes time and there is a risk of the card number and pin being hacked. This can lead to a situation where a customer’s credit card can be misused. On the other hand, mobile payment involves no risk. Even if a customer loses his mobile, without the password no one can use it to make payments. When a card is used for payment, the customer needs to hand it over to the billing clerk to complete the transaction. There is a risk where devices like skimmers can be used to steal data. Payment through mobile phone involves no such problems and is highly secure. Apps even allow biometric authentication to make app usage more secure.
How does mobile payment work?
Now that you have understood the benefits of mobile payment and its simplicity, you would probably like to know how it works. It is very simple, both you and your customer need to have the same mobile app installed. Since customers use different apps, you can install all the popular apps on your mobile phone (Apple Pay, G Pay WeChat pay, etc). In fact, it is so simple that if a customer prefers a particular app, you can download it instantly, activate it in no time, and start using it.
Once you install a mobile app to accept payment, you would get a QR Code or Quick response code. You can print this code and display it in your shop/office. The QR code is just like a bar code, it is a code that can be scanned. It doesn’t need a separate scanner, it can be scanned using the mobile phone. Once the QR code is displayed, any customer can scan it to make payments.
Once the invoice amount is decided, the customer can scan the QR Code using the option provided in the mobile app. Your details would be displayed on the app. All the customer has to do is key in the amount to be paid and select the pay option. The customer would be asked to enter the password/pin to complete the transaction. In some cases, biometric authentication is required for greater security. Once the authentication through fingerprint and/or pin is done, the transaction is complete.
The payment is carried out instantly without having to wait. The money is transferred from the mobile wallet of the customer to your wallet immediately. Depending on the type of app, it can also be transferred directly from the customer’s bank account to your bank account. You would get an immediate notification that the payment has been received. When you open your app, it would show the successful transaction and the amount paid. The entire process is simple and the best thing is that a customer need not reveal his account number or card number to carry out the transaction. It can be done easily through a QR code, making the process very secure.
NFC-based mobile payment
NFC is Near Field Communication. It is a technology that can be used by a device to identify another and communicate with each other without the need for internet connectivity. For this to work, the device or mobile phone should have NFC enabled on it. Most mobile phones have NFC prebuilt into it. Statistics show that there are more than 166 million users using NFC mobile apps. Apart from mobile wallets, if you wish to offer this facility also to your customers, this is how you can do it.
To implement NFC-based mobile payment, you would need a card reader. You may work with a service provider who can help you setup the required hardware. Using this technology payment can be made by a customer without having to swipe a card or even take out the card from his wallet. The card data can be stored on the mobile app. The two NFC devices, which is the mobile phone and the card reader, must be in physical proximity (not more than 2 inches apart).
When the customer brings his mobile phone close to the reader, both devices start to communicate and establish a link. The customer can thus use an app on his mobile to exchange data. The amount to be paid is displayed on the customer’s app. He can approve the payment by entering a pin or using biometric authentication (depending on the app used). Radio frequency is used by the mobile to connect to the card reader. Only a mobile, which has NFC, can be used for this transaction. An additional security feature is that a card reader would connect only to one device at a time. This avoids the problem of making a payment for someone else’s transaction by mistake.
To implement this feature, you need to purchase a card reader along with the necessary service for processing the credit card used by the customer. There are many service providers who offer this facility. They would charge you a processing fee for the use of their service for every transaction.
NFC is still evolving and may need time to become the acceptable standard. Payment through mobile wallets is extremely popular and easy to implement. If you are an artist or an entrepreneur running a small business then you can start using mobile wallets for accepting payments. All you need to do is install an app and let your customers know that you offer this facility.