Taking Payments on your Mobile Phone

Here’s a closer look what accepting payments on your cell phone entails, and what terms to look for in a mobile payment provider to ensure a secure and efficient payment transaction.

Allowing customers to pay with a credit or debit card can help you improve customer satisfaction, operational efficiency at the point of sale and may even lead to an increased average order value. While fixed point-of-sale terminals may require upfront investments in hardware, software and service contracts that aren’t feasible for your business, mobile payments can empower you to take customer payments using the cell phone you already own.

Here’s a closer look at what accepting payments on your cell phone entails and what terms to look for in a mobile payment provider:


Customer convenience

It’s estimated that by 2020, consumers will be more accustomed to paying on a mobile device than a desktop computer. Collecting customer payments on your cell phone demonstrates that you’re an innovative business that understands your customers’ lifestyles and their preferences. Incorporating mobile payments into your business’s payment processes also allows you to process customer payments at the exact moment customers want to buy, without requiring that they wait in a point-of-sale line, or invest more time into their visit at your store than they intend to.

Low to minimal upfront investments

Many mobile payment processors offer low-cost devices (sometimes called dongles) that plug into your mobile device to simplify how you process payments. Now that most credit and debit cards have been re-issued to include an EMV chip on the card’s front in addition to a magnetic strip on the back, most mobile payment providers also sell dongles that are compatible with EMV chip cards. EMV-enabled terminals provide a more secure transaction processing environment than swiping a card’s magnetic strip. Your business is more liable for any breach of data that may occur if it’s found that you didn’t have EMV terminals available when the customer paid.

If you don’t wish to use the dongle, you can also process customer payments by typing their card number into the mobile payment provider’s secure mobile app. Receipts are sent to the customer via text message or email to eliminate the need for a printer or hard copy documentation.

Low fees

The fees you’ll pay to process mobile payments vary by provider and the transaction type. Fees may be slightly higher for “card not present” transactions, for example.However, many mobile payment providers offer a variety of plans that suit your business’s unique model and its expected card transaction volume.

Efficient electronic payments

Like fees, the amount of time a mobile payment provider requires in order to consider your credit and debit card sales “settled” varies, but many providers transfer the funds you’re owed from mobile sales (less applicable fees) electronically to your business bank account in no more than a few business days. This eliminates the need for you to deposit cash and checks at the bank, and can help make your cash flow processes more seamless.

Flexible locations

Mobile payments allow you to securely process credit and debit card payments at remote locations, including trade shows, festivals and farmers markets, as well as the customer’s home or job site. If you aren’t able to connect to a secure wireless network at the time you collect payment, some mobile payment processors include features that allow you to suspend payment processing until you can find a secure WiFi network.

Secure payment processing reduces your risk

There are some standard best practices associated with how sensitive customer payment data is to be handled by a business that comes into contact with it. For example, customer payment information should not be handwritten on paper and retained by any member of your team — even if payment-processing terminals are temporarily down, or the customer asks that you do so. When you have the support of a mobile payment provider that guarantees PCI-compliant processing, you gain the peace of mind that you can process customer payment transactions when, where and how the customer prefers — and always in a secure environment. 

How to Make Sure Your Mobile Payments Are Secure

Your cell phone will not retain the customer information that’s used as part of the mobile payment transaction, but it’s wise to take precautionary measures to ensure a secure transaction. If your employees use their personal devices to collect mobile payments, for example, require that they download the payment provider’s secure app from its website (not a store like iTunes), and update the login credentials and passwords frequently. Require that they install the most current version of the device’s operating system and any updates that are released. Educate your team on the importance of being connected to a secure, password-protected online network before they access any system related to your business, including the mobile payment processing applications.

Mobile payments can provide mutual benefit to customers and the small businesses that leverage them. Follow these basic steps to ensure you provide a seamless and secure processing environment, and enjoy the convenience (and revenue streams) that accepting customer payments on a cell phone can offer to your business.

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