With paper money now used for only 19% of all transactions, it’s clear that mobile money is here to stay. And while mobile money transactions come in many forms, 21% of them consist of mobile merchant payments. In this article, we explain why mobile payments are so ubiquitous and how to choose the best mobile merchant service provider for your needs.
How Mobile Payments Work
The simple definition of mobile payment is “any type of payment made by your phone.” This payment solution relies on digital technology that connects a customer’s phone to their preferred payment source, such as a credit card. All major card networks now support mobile payments, ensuring that customers never have to pull out their physical card to make a purchase.
The biggest reason mobile payments are so popular is that they’re performed at a fraction of the time it takes to approve a credit or debit card. All customers need to do is hold up their phones and press a button to make a payment. As long as the merchant can accept mobile payments, this payment method can all but eliminate long lines at their POS stations.
What Are Mobile Merchant Services?
Now that you know why accepting mobile payments is important, how do you go about it? Simple: invest in a mobile merchant service provider such as Stripe, PayPal, Square, Shopify, and so on. Once you sign up for one of these services, all you’ll need to process mobile payments is a mobile card reader.
These days, mobile card readers come in two main types. First, you can use a merchant app to turn your phone into a mobile card reader. Alternatively, you can accept mobile payments by plugging a piece of hardware into your phone. All modern phones support both types of readers, so it’s simply a question of what your mobile merchant service provider can offer you.
Choosing a Mobile Merchant Service Provider
With so many distinct merchant service providers out there, it’s important to do your research before making a decision. Here are some main considerations to keep in mind:
• Features: When it comes to mobile merchant services, the phrase “the more, the merrier” doesn’t apply. If you’re not going to use certain features, don’t pay for them. For example, if you’re not planning on selling gift cards, there’s no need to pay for gift card processing.
• Processing fees: These fees include monthly fees, transaction fees, and chargeback fees, all of which can vary wildly between different merchant service providers.
• Payment options: Look at the payment options your customers tend to use before choosing a merchant service provider. Do they prefer contactless payments such as Apple Pay or will you need an actual gateway for online payments?