A Beginner’s Guide to Mobile Payments

As far as there are many ways to make mobile payments nowadays, our guide provides all you need to know about this convenient payment method.

Multiple companies including Google, PayPal, ISIS (a joint venture of AT&T, T-Mobile and Verizon), Sprint, Apple, Visa, LevelUp and hundreds of others are competing for the lead on mobile payments market. There are also such companies as Square, Intuit, VeriFone and PayPal that keep on offering convenience-based mobile payment acceptance solutions to attract small businesses. And as if it is not enough, you can add a deluge of additional noise from loyalty, gift and other mobile commerce specialists. If you feel confused, our guide will help you.

The most popular mobile payment options are:

NFC and Mobile Wallets

First of all, let’s clear up that NFC stands for Near Field Communication. It is a set of communication protocols that enable two electronic devices – traditionally, one of them is a portable device such as a smartphone – used to establish communication by bringing them close to each other.  Contactless payment systems use NFC devices to advance the use of credit cards and electronic ticket smartcards.

There are still doubts about the availability and implementation timeline of such payment method, which can’t but influence the adoption success for this group of mobile payment providers.

There are a variety of companies that offer mobile payments apps. Samsung Pay, Apple Pay, and Android Pay are among the most popular and well-known ones.

Apple Pay enables users to make in-app purchases with only one touch via Apple Touch ID on the iPhone 5, iPhone 6 and 6 Plus, iPad Air 2, and iPad Mini 3. Apple Pay is also available via Apple Watch.

There is a large list of partners that offer this payment option while Apple Pay continues to add numerous banks, credit unions, retailers and apps. Apple has also partnered with the three major credit and debit cards providers – Visa, MasterCard and American Express.

Apple Pay’s competitor, Android Pay, allows users to add credit and debit cards from the following providers: American Express, Discover, MasterCard, Visa, Bank of America, Navy Federal Credit Union, PNC, Regions, USAA, and U.S. Bank.

Android Pay works with some companies that are not included in Apple’s list – Chipotle and Domino’s, for instance.

Samsung Pay currently works with all consumer CIBC Visa and MasterCard Credit Cards with more partners, eligible cards, and value added services to be added in Canada soon.

This fast and easy payment method works with the latest Samsung Galaxy devices almost anywhere, so you can enjoy all the convenience you need on one Samsung device.

QR Codes and Loyalty Programs

The QR code system, initially developed for automotive industry, very soon pushed the boundaries due to its fast readability and greater storage capacity. LevelUp, one of the companies that uses QR codes to complete mobile transactions and loyalty campaigns, allows businesses to accept payments through a personalized QR code, provides integrated customer acquisition and retention opportunities, as well as peer-to-peer (P2P) mobile gifts.

This payment method is rather simple and convenient for customers. They just need to download a free app, connect it to their preferred credit or debit card and start making purchases.

LevelUp is attractive for businesses as well – the only requirements are an account and a dedicated mobile device, either a smartphone or tablet. Businesses do not need to pay interchange fees and drive new customer engagement through LevelUp’s traditional or co-marketing campaigns.

Mobile Payment Acceptance

The rapidly growing mobile payment acceptance offers a simple and convenient way to accept payments either off-premises or without a formal credit card terminal.

Businesses use a card reader connected to their merchant account via an attached card reader. The Internet connection allows these providers to accept and process traditional magnetic stripe (mag stripe) credit and debit cards.

Services from Square, VeriFone, PayPal, and Intuit have provided immediate payment-acceptance solutions to nearly 15 million U.S. businesses that don’t accept credit cards or need a secondary, ‘mobile’ payment gateway only for the last three years.

There are some debates that these solutions can’t be called truly mobile in terms of accepting payments from a customer’s mobile device. However, we couldn’t avoid this growing area that enables more small businesses to accept debit and credit transactions.

The bright example of the growing acceptance of this trend is recently announced partnership between Square and Starbucks.

The choice of mobile payment system

As far as you know possible options, it is important to decide which one to choose taking into consideration your specific needs and targets. It wouldn’t go amiss to read reviews, check rates, or maybe even visit your business’s competitors to see what is gaining traction in your local area.