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Mobile payment looks to be the future - everything you need to know
For the first time ever, retailers are seeing cash used in less than half of all transactions. In 2017 UK customers used their mobile phones to spend nearly a billion pounds at the checkout, marking a year-on-year rise of a 328%.
According to figures from WorldPay, the number of in-store contactless transactions made via mobile devices totalled 126 million last year, with the amount spent topping £975 million.
With Apple Pay, Google Pay and Samsung Pay all gaining increased popularity, almost a third of consumers are now taking advantage, with WorldPay also predicting exponential growth by the end of 2018.
But just what exactly are mobile payments and why is its increased popularity important for businesses?
Many people confuse paying via a mobile phone app with online payments using a mobile phone.
It’s important to be aware of the difference; mobile payment (sometimes referred to as mobile money, mobile money transfer or mobile wallet) generally refers to payment services operated under financial regulation and performed from or via a mobile device.
Still, mobile comes in many different forms; it can be people shopping from their mobile devices to checking and comparing product details while out and about. It can be paying from a digital wallet, in-app or social media payments, or can be mobile POS, taking the till in the form of a tablet or smartphone to the customer for customer assisted selling.
This is significant for businesses for a few reasons. If consumers pay using their mobile, the limit is much higher than £30, although few realize this.
A customer’s mobile phone provides additional authentication via fingerprint or other verification method, so the risk to the card issuer is much lower. As this becomes more commonly known, so transaction values and volumes are likely to increase even further.
Another key advantage of mobile digital payments is the ability to collect customer data - for both marketing use and to send online receipts. This allows retailers to build a relationship with the customer after they have left the store.
By also positioning digital payments alongside loyalty and reward schemes, the major goal is to drive customer acquisition and retention.
Consumers were sceptical about contactless technology when it was first properly introduced in 2007 and research suggests mobile payments are widely misunderstood by consumers.
But since banks have strengthened security, fears of fraud and scamming have eased and consumers are expecting to pay contactlessly for lower value products everywhere.
And mobile payment is likely to follow suit. There’s no need for a new card or device equipped with the right technology, customers need now just download the app and input details. What’s more, it means customers don’t have to remember their card every time they leave the house.
Whilst take-up of the new payment method hasn’t been overwhelming, businesses should be ready for that to change.
All small businesses should now take card and, at XLN Pay, we have a range of options to suit your business type; from countertop to portable to mobile. We offer small business-exclusive deals on card machines and portable payments, and our price promise means we’ll beat whatever price you’re paying now. Head to https://www.xln.co.uk/pay to find out more.
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