Mobile Payments: The Benefits and Costs
Every business, large or small, should weigh the benefits and costs of accepting mobile payments to determine if it is a smart move to make. Making it easier for your customers to spend money on your goods or services is never a bad move, however there are some considerations to think about before committing to accepting mobile money.
The Benefits
From ensuring sustainability to expanding sales and profits, there are many reasons why accepting mobile payments are beneficial for a business owner. According to research, mobile money is on the rise and quickly increasing. Conservative estimates show mobile payments rising up to over $210 billion dollars in 2015. Another study noted that by the end of 2014, there will be over 500 million mobile wallet users. It can be greatly advantageous for a business owner to capitalize on all available payment methods, especially one that will be preferred by millions of customers.
Accepting mobile payments can increase the company's customer base and allow them to obtain instant payments from those customers rather than trying to collect on invoices and billing. From pizza delivery to photographers and from ice cream vendors to plumbers, there are many small businesses that can greatly increase their amount of transactions per day by allowing for instant credit or debit card processing.
Credit card equipment was expensive and contracts were long-term and difficult to cancel. With the advent of m-Commerce, mobile commerce, business owners now have the option to accept credit or debit cards regardless of their location. The equipment needed for mobile credit card processing is much more affordable and many merchant service accounts allow for cancellation with no fees.
Processing payments through a mobile device is quick, secure, hassle-free, allows for instant approval and transfer of funds and increases the flexibility of the business owner's sales options. By adding the option to allow for mobile payments, a business can capitalize on the expansion of their customer base with minimal out of pocket cost.
The Costs
The cost of the equipment itself will vary depending on which type of service is chosen. One standard piece of equipment needed is the mobile device. This could include a Blackberry, Android phone, iPhone or other compatible mobile device. You may also need other equipment such as a credit card swiper or reader that is either built-in a case that slips on the phone or can be plugged in and used in conjunction with the mobile device.
Business owners must also be aware of all the fees that can be charged to their account by accepting mobile payments. Merchant processing fees, third-party credit card processing fees, per transaction fees, account cancellation fees, swipe rates and other charges should be analyzed and identified before making any final decisions. Some mobile payment service providers may offer low introductory charges to gain customers, only to increase those charges after six months or a year. Often times, those charges turn out to be higher than other places that offer a standard rate. It is essential to read all the fine print in order to determine if a particular mobile service is right for your business. Other service providers may also require a minimum amount of transactions per month and charge a fee if that minimum is not met.
There are many benefits to accepting mobile payments, especially if your business includes goods or services that are frequently conducted off-site. Mobile payments can increase sales, increase flexibility and is an arena that is quickly growing and expanding. However, it is up to the business owner to weigh the costs against the benefits and to see if it is something that will cause his or her business to come out ahead.
