Mobile payments were already gaining momentum due to increasing penetration of smartphones and digital adoption before Covid-19 struck. According to Nayax, a research projected that mobile wallets would become the world’s dominant POS payment method by 2023. In the aftermath of the pandemic, with accelerated digital adoption and a sharper focus on avoiding cash payments that milestone is expected to be achieved much sooner.
As depicted in the below chart, a forecast by Statista Digital Market Outlook suggests that the value of smartphone mobile payments will grow by 28% between 2019 and 2024.
So here’s some key information about smartphone mobile payments, to help you make smarter business decisions.
- Key benefits of smartphone mobile payments
For consumers, smartphone mobile payment option is not only convenient but also safer, both in terms of health and data protection. Moreover, it is speedier than using cards since there’s no need to insert or swipe the card and provide a PIN.
For the businesses offering mobile payments service, it helps in deeper consumer engagement and allows impulse purchases, increasing sales. Also, by demonstrating acceptance for new technology and prioritizing customer convenience, the business can enhance brand trust and widen its appeal. Merchants also have an option of integrating customer loyalty programs with mobile payments through NFC payment technology to boost conversions.
- Mobile payments can help businesses save costs
Research shows that businesses pay anywhere between 4.7% – 15% of revenue as cash-handling costs. Card transactions also involve paying a sizeable amount as fees that can be eliminated by accepting mobile payments. Moreover, it takes thrice more the time for processing cash payments than mobile payments, according to Visa. By allowing customers to use mobile payments, businesses also allow staff more time to attend to customers.
- Impact of mobile payments on customer experience
Mobile payments enhance customer experience in multiple ways. The wait time at the checkout cue not only impacts customer experience negatively but also costs retailers lost sales. It is estimated that in US longer wait times cost retailers around $38 billion annually in lost sales and another $1.1 billion because of not offering customers their preferred payment method.
Mobile payments enable fast and easy self-checkout, replicating the e-commerce payment experience, while also offering clients the touch and feel in-store shopping experience, that increases customer delight. It enables impulse buys or purchases even when the customer is carrying insufficient cash, or his card is declined. Further, processing refunds for customers is much simpler and faster with mobile payments and thus liked better by customers.
- Is mobile payment good for small businesses?
A 2019 study demonstrates that about 61% of small businesses struggle with cashflow. Payment collection becomes much easier with mobile payments. Mobile payments also help in curbing business’ cash dependence. By analyzing the data from the mobile payments, businesses can strategize better for the future and pick advance payments from problematic clients. Since mobile payment is a technology preferred by the current generation, it is also expected to enhance the customer base of small businesses.
- Most used mobile payment apps
While there are many service providers in the mobile wallet zone, most of them are in the nascent stage. In Asia the biggest players comprise of the QR code enabled mobile wallets – In China, WeChat and Alipay are dominant players, while Paytm enjoys substantial popularity in India. Google Pay, Venmo, PayPal, Apple Pay and Samsung Pay are the other major players in the global scenario.