Mobile Payments

How much cash do you have on you right now?

If you’re anything close to typical there’s a good chance you don’t have any at all. On the other hand, it’s probably a safe bet that your phone is within touching distance.

The way we pay for goods and services is changing rapidly and our ever-present smartphones will inevitably become the tool we use both online and in the physical world.

At FaxNgo we’re well-versed in the use of mobile phone technology to disrupt the traditional way of doing things. So here’s our take on what you need to know as a business owner to prepare for the coming mobile payment revolution.

Why You Should Care About Mobile Payments

The data doesn’t lie. Mobile payments (m-payments) are the growth sector of the payments industry. In its World Payments Report 2014, Capgemini predicts that mobile payments – this includes all types (app purchases, e-commerce, in-store, etc.) – will grow 60% in 2015, reaching 47 billion transactions per year. According to a recent survey by Visa, adults between the ages of 18 and 34 are four times more likely to carry a mobile phone than cash. In the US and UK, the use of coins and bills has already fallen behind cashless payments, and that trend will accelerate with the rise of NFC (Near Field Communication), beacons and other technologies that allow consumers to use mobile phones to pay in the real world.


Apple is betting on it. Apple’s decision to finally include an NFC-compatible system in the iPhone 6 and Apple Watch is a big deal. When Apple decides to put its weight behind a technology it tends to have the knack of bringing the general public along for the ride. And with Google and Samsung on board too there’s no doubt that the necessary hardware and software will be in place on the consumer side.

People are comfortable with paying on their phones. Everything is converging onto the mobile phone in your pocket. Whether it’s purchasing an app, hailing a ride with Uber or Lyft, lending money to a friend using PayPal, or ordering food via a service like GrubHub, most of us don’t think twice about connecting our cards to our phone apps to enjoy the convenience of one-touch payments.

The developing world is already ahead. The developing world is leading the way in the adoption of mobile payments. The success of Kenya’s M-PESA has seen it replicated across Africa and Asia. Launched in 2010 it now has close to 13m active customers who use it to transfer money to friends and family, access banking and pay for goods and services. Where there is little to no history of using cards there is nothing standing in the way of the rise of a convenient and portable form of payment that works as well online as it does in the physical world.

How Mobile Payments Can Improve Your Business

A better customer experience. Mobile technology has the potential to drastically improve the customer experience. For a start, it will contribute to frictionless payment, saving a little time per customer that will allow you to spend more time on promotion and assistance, as well as reducing the potential for mistakes at point-of-sale. Beacon technology is already showing other ways to improve the experience for customers. Using Bluetooth technology, an in-store beacon connects with an app on the customer’s phone when they enter and gives access to information such as store layouts, product details for mannequin displays, special offers and, of course, payment.

Personalized Marketing. The rise of mobile payment will give owners of bricks-and-mortar businesses the ability to leverage the same type of personalized marketing that online businesses take for granted. You’ll be able to analyze customer data to allow you to offer customers incentives and special promotions tailored to their habits. Starbucks’ mobile payment system is a great example of this. The system has been wildly successful and its tie-in to the My Starbucks Reward program saw the Seattle-based coffee chain sign up some 900,000 to the program in the first quarter of the 2015 financial year alone. The store plans to roll out a mobile order-and-collect service nationwide this year.


Security & Privacy. This is a category that will have a major impact on consumer acceptance of mobile payments. Credit card fraud remains a serious problem despite attempts to improve security technology. Apple Pay is a great example of the potential of mobile payment security. The device uses encrypted NFC technology to connect wirelessly with the payment terminal and requires the user to touch the phone’s built in fingerprint scanner to confirm their identity. The vendor receives no customer details, preserving both the customer’s privacy and the merchant against data theft.

Easier cash flow management. Not only does mobile payment make it easier for consumers to track their spending via real-time statements, it should also contribute to easier cash flow management for businesses, potentially allowing you to manage all transactions from a single terminal.

Look Before You Leap Onto The Mobile Payments Bandwagon

It’s easy to get taken in by the excitement and hype that surrounds new technology but as a business owner you need to ignore the shiny new gadgets and focus on how new technology can improve your bottom line.

One problem facing small business owners is knowing what technology to take up. With so many companies – both established and upstart – looking to take a piece of the pie there is a real danger that you could end up investing significant set-up costs in the ‘wrong’ technology.


There are a couple of things to consider though. By October this year all retailers in the US will need to upgrade to terminals that accept credit cards with EMV chips. Many of these terminals are also equipped with NFC, so for a small extra outlay you could be ready to accept Apple Pay, Google Wallet and other types of mobile payment.

Another idea is to look into local or industry-specific systems, such as GrubHub, that may be less costly to adopt and have an existing active user base.

There’s no need to jump blindly onto the bandwagon, but make no mistake, the mobile payments revolution is coming and it will change the way businesses and customers interact.

Read more: Three Mobile Payment Solutions for Your Small Businesses