Guide To Accepting Mobile Payments

Mobile payment technology involves making a payment through a phone or tablet. Understanding your mobile payment options will help you as you make point of sale and payment processor purchasing decisions.

When we first wrote this article a decade ago, mobile payments were just starting out, and we wrote things like, “Consumers have yet to catch on.” Well, they’ve caught on, and mobile payments are here to stay. But if you haven’t implemented accepting mobile payment technology at your small business, yet, here’s what you should know.

What Are Mobile Payments?

Mobile payments use an app or a web browser to help facilitate payments through a variety of methods, including NFC or near-field communication, mobile wallets, QR codes. Let’s go over the major players.

NFC

What is NFC? NFC, or near-field communication, is a contactless data transfer system similar to RFID. When two NFC-enabled devices come into range, you can transfer data from one to the other (such as bringing a phone in range of a credit card terminal). It plays well with other technology, such as Bluetooth and Wi-Fi, which is a big advantage. NFC is a safe method for payments. Sensitive data is stored in a secure element, either built into the SIM card of a phone or placed in a separate chip. In most cases, retailers never actually see your card or bank account data.

QR Codes

QR codes, or quick-response codes, have the sort of ubiquity that NFC lacks. They work a bit like your standard barcodes, except that instead of relying on one-dimensional analog scanning, they are digital. That means that with a QR code reader app, your smartphone’s camera can be temporarily converted into a scanner. QR codes can embed way more information than your standard barcodes, which gives them the power to do things like open mobile sites, direct you to YouTube Videos, and, yes, even enable you to complete mobile payments.

mPOS

What is mPOS? An mPOS system (mobile point of sale system) allows business owners to take digital payment types from mobile POS devices and connected card readers. To set up a mobile POS system, you’ll need to choose a POS app that’s compatible with a smartphone, tablet, or proprietary handheld POS device. Depending on your POS software provider, you may need to purchase a card reader from the software provider or a separate card reader from a third-party merchant services provider.

Mobile Wallets

A mobile wallet is saved card information on a device that a customer can use to make a payment. Mobile wallets use tokenization to secure payment information and keep it safe from fraud. Popular mobile wallets come pre-loaded onto popular phones, such as Apple Pay and Google Pay.

SMS Payments

A Short Messaging Service, or a text to your mobile phone, is another way to send secure payment information. A small business can send a text message to the customer with a payment link. Customers can finalize their purchase by replying to the SMS. A third-party mobile payment service then processes the transaction based on this reply.

Taking Mobile Payments

To start accepting mobile payments, consider your business model. If you’re on the go, a mobile solution like PayPal may be ideal. For brick-and-mortar locations, invest in an NFC-enabled terminal that supports major payment methods like Apple Pay.

Merchant account providers can help you obtain the necessary equipment, often at low cost or even for free. Top-rated providers like Dharma Merchant Services, CDGcommerce, and Helcim (the best credit card processing companies) offer various pricing models and terminal options to suit your needs.