Gone are the days when mobile phones were only good for making calls and texting.
Today, our cell phones can do anything; watch videos, listen to music, and even pay for the stuff we buy.
If you’re a business owner (aka merchant) that has some type of mobile business, it pays to have a way to process payments for your customers.
You can easily use your mobile phone (or your customers’ phones, in some cases) to process payments. It is a process that works much the same way that accepting payments in the store works.
You would need mobile payment processing if you have a business that needs to accept payments outside of a brick and mortar store.
There are many types of mobile businesses and people who could benefit from on-the-go payment processing services, such as:
This is actually a short list, but you get the idea.
Being able to process payments while you’re out and about is very convenient for you and for your customers. It will keep you from having to worry about processing them later when funds might not be available to cover what you sold.
There are many ways to process mobile payments just like there are a lot of ways to process in-store payments.
You can choose one of the options below, or a combination of them.
Lots of people are doing most of their shopping online right now, and they typically do it from a cell phone or tablet.
If you’ve ever shopped online, you’ve probably been taken to a shopping cart or a checkout form where you added your payment information. That is called making a browser-based payment.
In many cases, customer payment information is tokenized and stored so that when they return, they don’t have to enter it all over again.
In-app mobile payments are similar to browser-based payments. The only difference is that instead of going to a website, everything is done through an app on your phone.
Any store that has an app typically has this capability (aka Walmart, Target, etc.).
There are a lot of benefits to this method because customers can feel more at ease about the security of their purchases. All they need to do is register their preferred payment methods once, and they are saved for current or future use.
You can easily swipe credit card payments on the go when you have a wireless credit card reader.
These handy devices turn any mobile phone or tablet into a mini POS system. The reader pairs with the device either through a Bluetooth connection or through a pre-existing headphone jack.
Wireless credit card terminals are similar, but all they need is an active WiFi connection (and not a data plan) in order to accept payments.
Mobile wallet payments (aka Google Pay, Samsung Pay, Apple Pay) are becoming more common and popular.
They offer a way for people to pay for what they want to buy without having to swipe a credit card or even enter any numbers. This is done through NFC technology.
All you need for contactless mobile wallet payments is to have a reader that can accept them.
Your customers simply wave their devices across the reader and the payment information is captured, tokenized, and processed.
A POS system is a standard piece of hardware that many businesses use to accept and process payments. They come in all shapes and sizes, but can include any of the following:
POS systems are cloud-based, which means all data is stored securely in the cloud.
They can do a lot more than just accept payments too. Some businesses use them to:
Regardless of what type of mobile payment processing method you choose, your ability to do any of the above will be somewhat limited.
However, you should be able to access your sales information and reports online. Depending on the mobile processor you choose, you may be able to do even more.
The biggest difference between these two options is that one is mobile while the other is not.
Some merchants who sell products inside and outside their stores choose a combination of both so they have that added convenience of being able to process payments from anywhere.
So the big question is...how exactly do you choose the right mobile payment processor to meet your needs?
Let’s talk about what you need to consider before you make this decision.
First and foremost, it’s important to decide exactly how you want/need to process your payments. If you plan on selling inside a store as well as outside a store, you’ll want to talk with a company that offers both.
You can find mobile credit card processing services that include many features, but you might not need or use all of them.
Some baseline features that you’ll find include:
There are also some more advanced features you can opt for, like:
If you’re looking for high-end tech, you can find equipment that allows you to do everything from connecting a cash drawer to SKU and barcode scanning. It just depends on what your needs are.
Every time you swipe or key-in a payment, or take payments by mobile wallet, there are transaction fees involved.
Transaction fees typically range from 1% to 4.99% for standard-risk merchants, and they can be even higher for high-risk merchants.
Before committing to a mobile payment processor, make sure you get all the information you need about their rates. Otherwise, you could end up paying a lot more money for the same services you’d get elsewhere, but a lot cheaper.
Having said that...
Yes, there is a difference.
Payment aggregators like PayPal and Stripe are the companies that a lot of small business merchants start out using. They can work well for business owners whose transaction volume is relatively low.
But there are a lot of problems with them too.
For example, if you have a customer dispute a charge or ask for a refund (this is called a chargeback), and that happens frequently, a payment aggregator may freeze your account and hold your funds.
It’s not uncommon for them to close accounts without warning, which can hinder you from accessing your money for as long as several months.
Still, payment aggregators can work in some cases. They do offer an easy application process and sometimes you can be set up to accept payments within minutes.
Working with a payment processor like any of the ones listed above gives you an added layer of protection. You’re much less likely to have your funds frozen or your account closed when you do business with them instead.
Don’t worry. We’ll talk about why in just a minute.
Now that you have all the basic information you need, it’s time to choose your mobile payment processing company.
Here are some helpful questions you should be asking before signing on the dotted line:
There are a few other things you’ll want to keep in mind before choosing your mobile payment processor.
First of all, what is a merchant account? Is it the same as your business bank account?
No, a merchant account is what is necessary for you to be able to process payments with a mobile processor, but you’ll also need one if you choose a combo approach with a POS system or terminal.
Your merchant account is where the money will go once it leaves your customers’ accounts. From there, transaction fees and other fees are removed before it is sent to your business bank account, where you have access to it.
Payment aggregators use just one merchant account for everyone, which is why they often close accounts and freeze funds without notice. They have to manage their risk among all merchants in order to protect their master account.
But a mobile payment processing company will provide you with your own merchant account, possibly even more than one, if needed. This is a much safer option for you and your money because the risk level is substantially smaller.
Many merchant account providers also offer payment processing services. But not all of them do.
It’s not uncommon for them to partner with other companies to offer this service. But if that’s not something you’re comfortable with, look for one that does both.
When you’re working with a payment processing company, you need to be able to trust them.
If this is the first time you’ve considered accepting mobile payments, it pays to do your research. There is a lot of information available online about the best mobile credit card processing companies.
It’s a good idea to check reviews, the Better Business Bureau website, and this website to get information about any company you’re considering. Avoid choosing one that has been in business for only a short time.
You want to know that you can trust the payment processor you decide to work with. They’re going to have access to your livelihood, so make sure they’re dependable and honest.
Do you plan to grow your business? Maybe you started as a mobile operation, but eventually, you’d like your own storefront, or you may begin selling your products and services online too.
If that’s the case, choose a company that can grow with you, just like they have grown with other business owners.