Understanding mobile payments and their benefits in business
Understanding mobile payments and their benefits in business is an important part of operating in the digital world.
This guide explains how to start accepting mobile payments, along with the technology used, benefits and challenges.
What is a mobile payment?
Mobile payments let you use apps and digital wallets on your smartphone or tablet to pay for products or services. It's a quick, convenient payment method.
Why should businesses use mobile payments?
Using mobile payments for both B2C and B2B sales means you're offering customers a choice of how they pay. This enhances customer experience. The technology also improves security for businesses and customers, and provides valuable insights into customer spending patterns.
Mobile payment types and technologies
Here are the most common mobile payment types and technologies.
Mobile wallets
Mobile wallets store payment details digitally on mobile devices. Customers add credit cards, bank accounts and store cards to their mobile wallets and then pay by tapping their device on the payment terminal.
Near-field communication (NFC) payments
NFC is a mobile payment technology that lets smartphones and contactless-enabled cards communicate with payment terminals. If you accept Tap-to-Pay on iPhone or Android, your smartphone uses NFC technology to act as the POS terminal. Most modern smartphones, wearable technology and POS terminals are NFC-enabled by default.
QR code payments
Customers can scan QR codes with their smartphone cameras to pay for goods and services via a secure payment link.
SMS payments
SMS payments let people transfer money via text message. They're especially popular with businesses that provide services remotely or in regions with limited smartphone access.
Mobile point-of-sale (mPOS)
mPOS systems turn your mobile phone into a portable checkout terminal. As well as processing payments off-site, mPOS systems can help track inventory and collect sales data.
P2P payment apps
P2P payment apps like PayPal, Beem and Google Pay let customers instantly transfer money to your business bank account. They're a popular, cashless option for small business owners because you can accept P2P payments without any extra hardware.
How do mobile payments work?
Most mobile payments work by saving your bank account or card details on your mobile phone. When you initiate a transaction by scanning a QR code or tapping your phone on an NFC-enabled card reader, your encrypted payment information is securely transmitted.
Depending on your phone's security settings, you may need to authenticate the transaction through a passcode ot biometric method like fingerprint lock or facial recognition.
TIP: Solo by MYOB is the all-in-one all that puts everything you need at your fingertips. Available on iPhone and Android, with the ability to accept payments from physical debit or credit cards, ApplePay, Google Pay, and other digital wallets.
Benefits of mobile payments
Accepting mobile payments comes with a raft of benefits, including:
Enhanced customer convenience
Mobile payments enhance customer convenience and choice. Flexible payment options let customers choose the shopping experience they want.
Improved transaction speeds
You'll improve transaction speeds with mobile payments because customers won't need to dig out their card or input a PIN.
Better payment security
Mobile payment options have encryption and biometric authentication, making them more secure than cards or cash.
Mobile payment challenges
Mobile payments do come with some challenges to consider.
Network connectivity
You'll need to ensure you have good network connectivity to take mobile payments. Transactions won't go through if you have a poor Wi-Fi signal or limited cellular data.
Technical problems
Technical problems can happen if your customer has a problem with their device. That's why offering cash or card payments is a good idea, too.
Fraud management
Fraud management is vital for keeping your payments secure. Cybercriminals may target weak spots in mobile payment apps, so look for processors and systems with strong security features.
TIP: Accepting mobile payments through Solo by MYOB, MYOB Business and MYOB AccountRight means you're covered by industry-leading security practices and technologies, including ISO 31000 Risk Management Standard. Our security controls are based on the ISO 27001 Information Security Management Standard and are managed by a dedicated security team.
Regulatory compliance
You'll need to keep up with regulatory compliance when offering mobile payments. That means making sure you're taking steps to protect your customer data and meet payment processing regulations. Some payment processes take steps to build compliance into their technology. For example, MYOB Business and MYOB AccountRight's online payment technology complies with the latest Payment Card Industry Data Security Standard (PCI DSS).
How to accept mobile payments
Here's how to begin accepting mobile payments.
Decide which mobile payment types you want to accept
First, decide which payment types you want to accept. Evaluate your business needs and your customers' preferences to help you choose.
Choose a payment processor that meets your needs
Choosing a payment processor that meets your needs is essential. At a minimum, it should integrate with your existing accounting software and offer all major payment types. For example, MYOB's online payment software supports all leading payment processors, including PayPal, Apple Pay™, Google Pay™, BPAY and major credit cards.^
Set up an account
To set up an account, follow the instructions of your chosen processor. You'll need to provide the payment processor with some details about your business and go through the provider's verification process. For example, getting started in MYOB Business or MYOB AccountRight is simple.
Verify your business, by opening the sign-up website and entering your
Business details, including ABN, business name and industry
Cash flow estimates
Bank account
2. Then check that the business owner's email address and mobile number are correct and add a driver's license or passport to verify.
3. Check over the details you've entered and agree to the terms and conditions.
Configure settings and options
Configure the settings and options of your new mobile payment system. During this stage, you can choose the currencies, payment methods, subscriptions, or buy-now-pay-later options.
Start accepting mobile payments
Once you've tested your new system, you can start accepting mobile payments.
Mobile payments FAQs
Are mobile payments secure?
Yes, mobile payments are secure, especially when compared to traditional card and cash payments. They use encryption and tokenisation to keep payment information and business data out the the hands of cybercriminals.
If you're planning to accept mobile payments, make sure you pick a processor that's PCI DSS compliant, like MYOB online payments.
Is it better to pay using a mobile device or a physical credit card?
Some people think it's better to pay using a mobile device — it's quicker, easier and safer than a physical credit card. However, it may come with additional fees, which means some peoples prefer other payment methods.
What is the difference between a mobile payment and an online payment?
Mobile payments are online payments that use smartphones, tablets or other mobile devices. Online payments are any payment made through a website or app and are especially important in B2B ecommerce.
Get paid on the go
Accepting mobile payments makes transactions faster, safer and more convenient for you and your customers. Connecting your bank accounts to MYOB lets you effortlessly track mobile payments to improve cash flow management and monitor your financial performance.
Whether you're a sole trader or an established enterprise, it's about getting your business running smoothly. Get started with Solo by MYOB today.
Securely connect your bank accounts
Solo smart-matches your bank transactions with invoices and expenses – no more manual work, just review and approve.
Take payments on the spot with Tap to Pay
Tap to Pay uses the latest technology to let you take in-person payments instantly. Available on Android and iPhone, with the ability to accept payments from physical debit and credit cards, Apple Pay and Google Pay.
Create and send invoices directly from your phone
Create professional invoices in seconds from the Solo by MYOB app – you can also apply your logo and brand colours. You can send your invoices by email, text or WhatsApp and check who has (or hasn't) paid.
^Applications for online payments are subject to approval. Fees apply: $0.25 per transaction + 1.8% of total invoice. Fees are inclusive if GST and will be automatically passed on to your customers unless you turn off surcharging. Payment accepted via Visa, Mastercard, AMEX, apply Pay, Google Pay and PayPal. You can also choose to enable BPAY, but cannot pass on a surcharge to customers who pay via BPAY. View terms and conditions here.