Consumers’ approach toward payments has changed in recent years. First, many Americans have ditched the dollar in favor of credit, debit, and online transactions. It led to the rise of countertop Point-of-Sale (POS) systems, allowing businesses to accept debit and credit payments.
But the prevalence of smartphone use has put focus on a specific transaction method: mobile payment.
Milking the Mobile Money
In other parts of the world, especially China, mobile payment adoption is moving full steam ahead. The Business Insider Intelligence’s Mobile Payments Report predicts that in-store mobile payments in the US will grow up to $128 billion in 2021 at a 40 percent compound annual growth rate (CAGR).
Mobile money does contribute to the slowdown of cash payments, according to the CNBC report. U.S. Bank surveyed over 2,000 people and found that 50 percent carry cash with them less than half the time whenever they go out. And 76 percent only bring less than $50 for small emergency purchases.
The Vibes 2019 US Mobile Consumer report revealed that 28 percent of smartphone users are already using a mobile wallet of some sort, higher than 2018’s 22 percent. Also, 20 percent expressed their interest in digital wallets, suggesting the projected rise of this payment method.
Although the US has yet to fully embrace this method, businesses have plenty of reasons to adopt mobile transactions as early as now. Mobile payment systems allow them to incorporate incentive and loyalty programs. These setups help customers to keep track of their points, purchases, and rewards, which can encourage more purchase.
Mobile transaction systems also enable businesses to easily monitor and understand the purchasing behavior of customers. This can strengthen a brand’s personalization efforts for marketing.
But the rise of digital payments doesn’t mean businesses should forgo cash transactions entirely. The point is to be where the customers are. And while mobile transaction is slowly gaining traction, bills and coins remain relevant in people’s purchasing activities.
Green is Still In
Consumers use different payment methods depending on their location, the item they’re buying, and the retailer. For instance, 41 percent of internet users would rather swipe their credit cards when buying from online-only sellers. But only 24 percent paid via credit at convenience stores because cash seemed like the more logical option.
What this means is that businesses should tailor their transaction options according to the market, business type, and products. Another trick is to look for a flexible software or device that allows them to accept a variety of payment methods, such as merchant accounts. Providers like Merchant Card Advisors offer systems that support online, mobile, and in-person payments.
Most merchant services support various credit card networks, fund transfers, and mobile wallets, and come with a POS terminal as well. So, you can cater to both cash and digital wallet users.
Ultimately, integrate your payment system with your overall marketing strategy. For example, accepting mobile transactions is the logical move if you’re planning to target the smartphone-dependent market. This can mean partnering with different digital wallets or creating your own mobile app. But if you’re only starting to digitize your sale, prioritizing online credit card transactions is a smart move. According to ING Bank, 45 percent of online transactions are still made via credit cards.
Study your market carefully and plot payment methods to serve your customers well. Convenience, and data security, is key to attracting mobile-savvy buyers.