8 Things to Consider Before Accepting Mobile Phone Payments

mobile phone paymentsRecent technological advancements in payment methodology are totally working out for customers.

And why shouldn’t they? After all, they provide customers with the freedom of making purchases swiftly and securely.

In an age where people don’t carry cash anymore, it is important for retailers to adapt to the changing trends in mobile phone payments.

When it comes to processing different types of mobile phone payments, things can get a little tricky for retailers, as they might have to make changes to their point-of-sale systems.

Also, credit card companies ask for processing fees which make the system unviable, as customers are reluctant to bear the additional cost. Thus retailers have to forego a portion of their profit margins.

But it is also true that retailers, both online and offline, can’t ignore the changing trends and have to comply and adopt all the latest mobile payment methods to stay relevant in the competitive market.

If you are an online retailer, is not enough to just go for fancy e-commerce store development or have a mobile app for your store.

Having mobile payment options also can help you get a competitive edge over others.

However, before venturing into the world of mobile phone payments processing, it is important to consider certain things.

Given below are some guidelines on selecting the right payment processing for your business.

1. Conduct research

No matter what payment method you adopt, it is a must for you to know about the facts and myths attached with debit, as well as credit card processing.

Start with understanding the difference in the fees.

  • Transaction fee: Percentage or flat rates that are charged with each transaction
  • Interchange fee: The percentage of the transaction charged by banks which goes to the issuing bank related to the card
  • Monthly fee: The regular charge occurred for using the service. If there are no monthly fees involved, the processing rates are high.

Most business owners are of the opinion that American Express is an expensive card to process. However, they need to know that American Express is just as good as Visa/MasterCard.

It is also a fact that customers who pay with their American Express card tend to purchase more, as compared customers paying with MasterCard or Visa.

2. Get tech-friendly with mobile phone payments

Don’t get bogged down by the different payment methods available if you don’t fully understand them. The task of integrating different payment technologies might seem intimidating initially.

However, you must understand that if your business is an established one, you are likely to lose out on potential sales if you do not adapt yourself to the changing payment methodologies.

There are several technologies and mobile credit card readers that are extremely easy and cost-effective to implement.

Try not to ignore such tools, as they play a significant role in enhancing your business revenues.

3. Enable desktop processing integration

You must choose a mobile option which easily gets incorporated with your traditional desktop point of sale terminal.

Although most payment processing firms offer mobile solutions, it is important to make sure that you can track all the transactions from one place.

Beware of processors that try to coax you with their mobile app and end up charging you a lot for both desktop and mobile processing.

4. Get in touch with the best merchant card processor

When you look for a merchant card processor, you become a customer to them. Several companies will claim that they will provide you with competitive rates.

However, you should find out what that company charges for general services fees and rates. You must also remember that a bank is not always an ultimate choice.

There are several third party merchant card processors that provide you with better rates as compared to banks.

Also, it’s not just about the rates involved.  A particular company might give you good rates at lesser prices.

But the question is, does it give you money on time? Does it provide with a good customer service during crucial times? Will it keep your information secure?

So, apart from the rates involved, the above mentioned factors should also be considered.

5. Check encryption capabilities

The privacy and security of the card holder are the two most important concerns in the world of payment processing.

Some card readers that scan credit cards have weak systems and do not have the potential to encrypt the data of consumers.

If you lose your smartphone or tablet, it might put the credit card data at risk. Also, customers can file lawsuits against you.

So conduct proper research and select the right processor for mobile solutions.

6. Set stringent payment guidelines

Your customers must get a clarification about the ways in which they can transact with your company.

There are some companies that provide information about products for which payment plans and scheduled payment terms are applicable.

If your business falls into one of these categories, make sure your customers are well-acquainted about these expectations.

These points can be explained on your website under the ‘Payment Terms and Conditions’ category.

You can also provide incentives or discounts for those customers who pay early. In short, you must be aware of different options you can select for upgrading your payment processing system.

The more options you provide to your customers, the more successful your business will be.

7. Keep track of billing

There is nothing as quick as a mobile payment transaction – agreed! But if daily transactions occur on your store, it becomes important to stay on the top of payments.

To avoid getting overwhelmed, you must work with a professional online service so that your mobile pay invoices get filed in real time.

Automated invoicing systems work great as they make it easy for you to follow up with customers. Moreover, you can keep a track of every transaction that happens with your company.

8. What else should you remember?

Although there are several advantages associated with accepting mobile payments, the price factor can be a little disappointing.

These prices include the costs of hardware and the processing fees related to it.  Take two things into consideration:

1. Processing fees

Payment processing companies charge fees based on the type of transaction. For example, NFC (near-field communication) based payments can prove to be quite costly, as every payment is associated with the credit card.

The major reason behind these charges is that it is categorized as a CNP (card not present) type of payment and involves extra fees due to security reasons.

2. Hardware fees

If you want to accept contactless mobile payments through Samsung and Apple Pay, your payment terminals must be NFC-enabled.

This might involve some expensive upgrades or a complete replacement of your current hardware.

The Future of Mobile Payments

Mobile payment technologies are evolving with the increasing percentage of customers accepting them.

Forrester has estimated that by the year 2021, mobile payment transactions in the US will grow to $282.9 billion.

Starbucks has achieved great success in implementing mobile technology with value-adds.

Since Starbucks has a loyal and regular customer base, the coffee powerhouse processes more than 4.5 million mobile payments every week.


With so many technologies getting introduced, it wouldn’t be surprising if payment through cash and credit cards becomes extinct.

In fact, pretty soon you might also have to ask your customers if they are willing to pay through their mobile phones.

Have you thought about adopting any of the above new ways to accept mobile phone payments? If not, now is the right time!

Author Bio:

Mr. Maulik Shah is the founder & CEO of Biztech IT Consultancy Pvt Ltd., one of the leading Web Design and Development Companies in India. He also runs Biztech Blog, where he shares insights from the world of e-commerce and other web-based technologies.

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