How mobile payments work
Mobile payment technology allows a customer to pay for a product or service digitally, instead of using cash, cheques or physical credit cards.
To complete a mobile payment, customers will need a mobile wallet. A mobile wallet, also known as a digital wallet, allows users to securely add and store credit, debit or loyalty cards via an app so customers can “tap to pay” in stores, using NFC (near field communication) technology.
Digital wallets can help people to pay when shopping online (for example: PayPal), transfer money between friends, or pay with a phone.
NFC is the technology that enables two devices, like a phone and a payment reader to communicate wirelessly when they are close together (typically two inches apart). In order to accept an NFC mobile payment at your business, you need a payment reader.
Below are the most popular examples of mobile payments:
Apple Pay works on an iPhone and an Apple watch. Customers store their debit or credit cards details onto the device so when they are in store, they can hold it over the card reader while holding their finger on the Touch ID button for biometric authentication - one of the most secure ways to complete a transaction.
If you are setting up Apple Pay you will need a payments reader enabled for NFC. If you run an online store, you can accept Apple Pay through your app or website without a reader.
Google Pay, is available on all NFC-enabled devices that run Android version 4.4 or later. Just like Apple Pay, all users need to do is open the app on their mobile phone and complete the transaction by holding the device over the payments reader.
Users simply open the Samsung Pay app, and select the card they want to use for payment. They then use their PIN, IRIS, or fingerprint to verify their identity and finally hold the back of the phone to the reader to complete a purchase.
Other mobile payment methods include:
QR codes go a step further in mobile payments. Instead of having to pay through a POS terminal, customers scan your business’ QR code using their mobile device and make payments from their bank or payment service’s dedicated app. Payments are transferred to your dedicated merchant account where you’ll then receive funds instantly without even having to use a POS terminal.
Mobile to Mobile Payments
Mobile-to-mobile payments allow users to make quick and secure payments using a mobile number. Essentially, consumers sign up for mobile-to-mobile services and then send and accept payments, as long as both parties are subscribed to the same service.
How to accept mobile payments?
To start accepting mobile payments at your store you should make sure you have the following:
Equipment to accept mobile payments
Your payment service provider should have a variety of options for different budgets to match the way your business works. Most Point Of Sale (POS) terminals are ready to accept mobile payments.
Technology to accept mobile payments
The POS terminal you chose will need to be equipped with NFC technology. Encryption and tokenisation are solutions that will be already working in the background to help protect your business against fraud.
A trusted payment service provider
Your card processor and merchant service provider can work with you to help you implement a mobile payments strategy to help maximise your revenue and increase sales.