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article imageSmall businesses adopting mobile payment technology

By Tim Sandle     Aug 3, 2017 in Business
Smaller businesses need to fully realize the advantages of adopting digital technology and one growth area is with the adoption of mobile payment technology.
Mobile payment technology steps away from cash or credit card payments, and offers time and cost savings for small businesses. This is the theme of this second article from Digital Journal's overview of the digital transformation of small businesses. The first article presents general business trends and the third article looks at an innovation in integrating digital invoicing an digital payments.
A machine that accepts Google Wallet transactions
A machine that accepts Google Wallet transactions
Sean Narvasa
With mobile payments, this indicates payment services performed directly from or via a mobile device. As an alternative to paying with cash, check, or credit cards, a consumer uses a mobile phone to pay for a wide range of services and digital or hard goods. The technology to support such systems is becoming more widely available.
The five primary models for mobile payments are:
Mobile wallets,
Card-based payments,
Carrier billing (such as by SMS text message),
Contactless payments NFC (Near Field Communication),
Direct transfers between payer and payee bank accounts in near real-time.
READ MORE: New approach to digital payments and invoicing
In terms of changing consumer patterns, the website Mobile Payments Today reports that, in the U.S. a quarter of the population, primarily millennials, are using mobile payments above nay other payment method when this means of paying is on offer. This is primarily, in terms of retail, by NFC technology and mobile wallets. Near-field communication technology works by bringing together two electronic devices. This is typically a mobile device such as a smartphone and a reader of some kind. With payments technology, the reader is the initiator and the smartphone (which contains stored credit card information) is the target. The mobile wallet is essentially the same; this is a virtual wallet that stores payment card information on a mobile device. The system allows a user to make in-store payments and it can be used at merchants who are listed with the mobile wallet service provider. A likely future development is with Bluetooth, since Bluetooth has a much longer range than NFC. Bluetooth can reach up to 50 meters compared to NFC's need to have the two devices centimeters away from each other.
READ MORE: Why small businesses need to consider digital transformation
The major players in terms of offering the technology are Apple Pay, Android Pay, and Samsung Pay). The website sends out a signal to small businesses in terms of the need to adopt this type of technology where services are offered directly to customers. The website additionally warns small businesses that consumers are increasingly expecting purchases to be delivered much faster, certainly beyond the standard model of a couple of days; instead there is a growing expectation of goods deliveries within a few hours.
Expressed in terms of revenue, Business Insider's report for the end of 2016 showed mobile payment volume reached $75 billion. By the end of 2017, this is expected to have risen substantially.
With these trends, small businesses should consider adapting to these technologies. Smartphones are a convenient way for consumers to pay for items, reflecting consumer trends, and the payment process is relatively secure. The advantages for business are lower transaction costs, less administration and with maintaining a competitive edge.
The third article in this series looks at a new innovation in bringing digital invoicing an digital payments together. This could the be the start of a new trend and business offering.
More about mobile payments, Small business, business technology
 
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