Mobile Payments, Procurement

How To Take Mobile Payments For Your Business

Allison S Robinson | 27 December 2021 | 2 years ago

How to take mobile paymentsMobile payments allow businesses to accept and process payments by phone without the need for cash or cards. If you like the idea of being able to accept payments on the go without expensive tills, whilst keeping up with the expectations of an increasingly digitally focused society, then you may be looking into how to take mobile payments for your business.

To take mobile payments for your business you will need to:

  • Choose a payment processing vendor and register your business with their mobile payment system.
  • Purchase a card reader that accepts NFC, contactless payments
  • Connect your business bank account to your payment software.
  • Pay attention to the security of your mobile device
  • Test your new payments system
  • Tell your customers that you can accept mobile payments
Using a mobile device to accept payments makes it easier for your customers to pay you wherever you and your business are. It is a particularly useful way of accepting payments for businesses without a fixed till point, those that attend events, or visit customers in their own home.

Why Go Mobile?

We are a nation of phone lovers. With the average Brit apparently checking their phone over 10,000 times a year, you’re hard pushed in this day and age to find somebody under the age of 50 without a smartphone on them.

Mobile phones are our ticket to having everything we could possibly need to go about our daily lives at our fingertips. From calls, internet browsing, social media, maps, taking photos and videos, mobile payments are also now becoming the go-to way to pay for the next generation of shoppers online and in-store.

Customers are quickly starting to expect mobile payments to be accepted as standard, so if you’re not on board you could be missing out on a whole load of sales.

Read on to find out more about what you need to do to make your payments mobile. You can then make an informed decision to decide whether mobile payments are right for you and your business.

What Are Mobile Payments?

Mobile payments refer to the process of accepting and paying for goods and services via a mobile device. Mobile payments allow businesses to accept payments digitally and for customers to pay via a payment wallet that stores their banking details on their phones. This offers a quick, secure and efficient way to pay compared to traditional cash payments or using a physical debit or credit card.

For the customer, mobile payments can be made via an app on their phone which stores their credit and/or debit card details and effectively turns their phone into their payment device. When in close range to your business’s payment receiver, it will transfer the required funds digitally via a secure token.

For you, the business owner, a mobile card reader allows you to use your mobile phone as your point of sale (POS) system instead of expensive standalone tills. This is a great option for when you need to run your business on the go, want to save on capital costs of expensive POS systems, and want to ensure you’re able to serve digitally minded customers. To accept mobile payments via your phone, you will need to purchase a mobile card reader and download a supporting app from the vendor that supplies this hardware.

How Does It Work?

Making and taking mobile payments removes the need to swipe credit or debit cards, signatures or enter PINs. Instead, a virtual token is generated which represents the numbers on the bank card to process the transaction.

When your customer wants to pay for their goods or services, they open up the wallet app on their phone and present their phone within a few inches of your mobile card reader. The reader uses near field communication (NFC) technology to process the payment.

Card details are safe as the process uses a virtual token that digitises the card numbers, known as tokenisation. There are other methods of making and taking payments via phone including QR codes which are used by PayPal but we’ll cover that in more detail later in this article.

How To Set Up Mobile Payments

If you’re sold on the benefits but think it sounds complicated, the good news is it’s easy to set up your business to accept payments in this way.

  1. Purchase a card reader if you don’t already have one or upgrade the one you have if it isn’t able to receive NFC signals or QR codes so that it can accept contactless payments.
  2. Choose a payment processing vendor and register your business with their mobile payment system. Each vendor will have an app that will need to be set up but this will simply be a case of visiting the app store, downloading it, then following the prompts on the screen to input the information required. Pay special attention to settings around security features, backups, minimum payments, offline capabilities etc.
  3. Connect your business bank account to your payment software. Again, there will be step-by-step instructions to follow from your payment processor.
  4. Pay attention to security.
    1. Before taking any mobile payments for your business, ensure that the device you are using is secure with all software updates completed.
    2. Only use trusted payment vendors and only download apps from mainstream app stores such as Google Play or the Apple Store.
    3. Keep the device that you use to take payments secured with a passcode or fingerprint access that only those who are taking payments on behalf of the business will know.
  5. Test your new payment system before going live! We would recommend testing your ability to take mobile payments in private before you have any paying customers around. This way you can iron out any technical issues and tweak settings without holding up your customers or losing potential sales due to hiccups on the day.
  6. Tell Your Customers That You Can Accept Mobile Payments. The final step is to tell your customers that you can now accept mobile payments. Whether you have a fixed store, or use pop up stalls or operate from a van or truck, make sure you have clear signage displayed that indicates that mobile payments are accepted. You can also share the news on your social media pages and website so that no matter how potential customers hear about your business, they will all know how they can pay you.

Options For Accepting Payments

There are three types of mainstream technology that you can choose from to be able to take mobile payments from customers.

  1. Near field communications (NFC) payments
  2. Quick response (QR) codes
  3. Magnetic secure transmissions (MST) payments

Near Field Communications (NFC) Payments

NFC payments are contactless payments that are made between a customer’s mobile phone which contains an NFC chip and your NFC enabled card reader. The NFC chips ensure that data passed between the devices is encrypted. Customers will usually be asked to confirm the transaction by using their fingerprint or facial recognition security steps set up on their phone to finalise the purchase.

Quick response (QR) codes

QR codes have been around for a while, but you may be more used to using them in the scope of ticket sales or online menus rather than taking mobile payments.

A QR code is a black and white graphic made up of 2D blocks that when scanned with a QR reader or standard phone camera, can be decoded into readable information. There are two ways to use QR codes to take mobile payments:

  • Either, your customer scans your QR code (that would be supplied by your payment merchant), then they would then be prompted to confirm the transaction via a pop up on their phone.
Or,

  • You could scan a QR code provided by the customer’s QR payments app. This app would be set up by the customer already to hold their card details and when presented to you, your QR reader can scan their QR code for the info it needs to complete the sale and is finalised when approved by the customer via the app using their fingerprint or facial recognition security features.

Magnetic Secure Transmission (MST) Payments

The MST payment system uses a magnetic signal to connect between a customer’s mobile device and your point of sale (POS) terminal when the phone is near the reader. The signal enables the phone to mimic the magnetic strip on the back of a credit or debit card so that when held up to a card reader, it simulates the act of a physical card being swiped through the device.

If your credit card reader already has a magstripe reader, you won’t need additional equipment to process MST payments the way they do to process NFC payments

Related Questions

What Are The Benefits? 

Moving your business to be able to accept mobile payments will go a long way to improving customer experience, increasing your sales volume and reducing hardware costs.

The next generation of customers may never pay for goods and services with cold hard cash, so our businesses must stay on top of evolving payment methods so that we can continue to meet our customers’ needs when it comes to accepting payment. Here are just some of the benefits of mobile payments.

  • As more and more customers get used to the idea of paying via their mobile, you’re likely to start missing out on high-value sales if you don’t have a POS that is set up to accept mobile payments.
  • You can minimise the time that customers are queuing by eliminating the time it takes for customers to dig out their payment cards from their wallets. With a simple tap and go with their mobile, you can serve double the amount of customers in the same amount of time without waiting for a PIN, signature or counting out coins in front of you!
  • You or your staff can accept mobile payments from anywhere in your store or out and about if attending events as you won’t need to be connected to a traditional POS terminal to process customer payments.
  • A mobile payment system should be linked to your accounting system meaning you won’t have to manually enter this information and your bookkeeping is extra efficient.
  • With less cash around, you will save time cashing up and making bank deposits.
  • POS systems and tills are expensive investments that offer a whole host of features that some small business owners just don’t need. If you simply need a way to take payments from customers then mobile payment methods are a great way to go. Most vendors will supply a free or low-cost card reader and transaction fees making it a financially viable way to take mobile payments.
  • Mobile payments are just as secure, if not more so than credit card payments. The tokenisation used makes the data useless to hackers and cybercriminals.

Can Anyone Use Mobile Payments? 

It doesn’t matter whether you’re a self-employed plumber and work alone, if you have a couple of staff, or own a shop, mobile payment options were designed with small businesses in mind.

As long as you have a mobile phone or tablet device and are prepared to pay a transaction fee per payment or small cost to purchase the card reader, then you can get yourself set up to accept mobile payments in no time.

Choosing A Payment Processing Company 

All mobile payments are processed via a third party bank or financial institution. They provide access to their service via an app on your mobile or tablet device. Choosing the right payment processor for your business will depend on how much you want to spend. Each vendor will come with their own set of startup costs, ongoing fees and level of compatibility with your business model so pay attention to the small print when evaluating your options.

Summary

If you want to make it as easy as possible for your customers who prefer to use a mobile wallet over traditional debit and credit cards to pay you, we hope this article has provided an overview of how to take mobile payments for your business.

To enable mobile payments which offer quicker, secure payments, and increased flexibility for running your business from anywhere, you’ll need to find a vendor such as SumUp and Square Reader that can provide a card reader and app that supports mobile payments. Most mobile payment processors will offer a fixed fee per transaction once you have purchased their card reading device.

Although the ability to offer mobile payments might open up more business opportunities, you should always weigh up the cost of setting up the tech in the first place to decide if it’s a financially viable business decision. You may find that having the flexibility that mobile payments offer will actually end up hurting your profits if you don’t take enough payments to cover the capital and transaction fees involved.

Mobile payments are rapidly becoming a go-to payment method that customers are expecting so the easier you make it for customers to pay you, the more likely they are to keep coming back.

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