Mobile payment solution? It’s the new black

With the stratospheric growth in smartphone ownership in Australia and all around the world, it’s no surprise that technology for mobile payments is becoming big business, and for very good reason.

For a number of industries, the ability to make and accept payments via the ubiquitous smartphone is seen as a bit of a holy grail. If you’re paying attention to the tech startup scene, the sheer number of new players emerging each week in the mobile payments space is truly staggering.

With a recent survey suggesting that the vast majority of smartphone users would rather lose their wallet than their phone, it’s no surprise that major banks are investing serious resources into making the entire banking experience much more mobile-friendly.

Mobile payment revolution

Square, PayPal and (more recently) MYOB are some of the companies offering relatively low cost solutions to help small businesses get in on the act and start accepting mobile payments.

By downloading an app and attaching a card reader, users have the ability to turn their smartphone into a payment terminal. They can accept payments on the go from a credit card or directly from a customer’s mobile phone, reducing reliance on slow, cumbersome technology and improving the overall speed and customer experience.

The flexibility this affords businesses, particularly those that operate remotely, is a real game changer — meaning that pop-up shops and night markets can easily offer alternative forms of payment that can be even cheaper than a traditional credit card facility. The convenience and novelty alone, not to mention the low cost of entry, is reason enough for most businesses that take over-the-counter payment to give it a go.

But beyond the transaction itself, mobile payments also allows for integration with other functions of a smartphones, such as loyalty and rewards, doing away with the need to carry plastic loyalty cards and having to remember to claim your purchases. Implemented correctly, this can lead to a huge increase in customer loyalty. Starbucks, by far the gold standard in this space, attributes 14% of all transactions to mobile, which is staggering.

The signs are definitely there that consumers are becoming more and more comfortable with shopping with their phone. While security has historically been a concern and a barrier to transacting online, this is no different to where online shopping was a decade ago.

However, with the way smartphones have become an essential part of our lives, it’s apparent that mobile payments will be the norm sooner rather than later. And, with Apple only offering mere hints at their mobile payments strategy — which should make mobile payments even easier for iPhone users — you can be sure we are only at the tip of the iceberg.