Mobile Payment Processing Costs

Your customers can pay for their purchases with their mobile devices today. People can use cloud-based payments, NFC payments, or transactions that incorporate QR codes or barcodes to complete their payments. A customer can link one’s credit card or banking info to the card and then send that data to your receiver in moments. The process is simple, contactless, and secure.

Like with any other payment method, you will have to spend money to accept mobile payments. There’s no defined value as to what you’ll spend on each mobile payment you collect. But there are some points to notice when handling these payments, including how you’re getting the hardware to process these deals. 

The future of mobile payments may also play a part in what they cost. While they might cost a good deal in some cases today, they may be more affordable to process soon. Mobile technology is evolving and becoming more prevalent these days. The potential for these payments to be more valuable is worth spotting.

Are They NFC Payments?

Some mobile payments may cost extra to process because a processor interprets them as CNP payments. An NFC payment that doesn’t require a physical card may be a card-not-present or CNP payment. Since you cannot access the customer’s physical card, you’re carrying a higher fraud risk.

Not all mobile wallets will treat NFC payments as CNP transactions. Some wallets can secure digital card data and produce a virtual version of a card. The process ensures the data stays secure, plus the transaction becomes a card-present deal that won’t cost as much to process.

NFC payments aren’t as prominent as other traditional methods. Therefore, some networks may interpret these payments as CNP deals. But the odds of them becoming card-present transactions could be more likely as NFC technology becomes more prominent.

Are They Cloud or QR-Based Payments?

You may spend less on mobile payments if they are cloud or QR-based ones. These payments link to an automated clearinghouse or ACH. They may also link to pre-paid cards. These payments don’t require extensive bank network reviews, leading to lower processing charges.

The ACH entails an operator receiving data from various banks that support cloud or QR payments. Most of these payments are debit transactions, although they may also entail dedicated monetary funds supported by certain platforms. Since the process doesn’t entail working with a line of credit, the cost to process the deal is minimal. The transaction is paid off in moments.

Could Security Play a Part?

Mobile payments may cost less to process on some networks because they are secure. A user will incorporate a two-factor authentication system in most cases. The customer will enter a PIN or use a biometrics feature on a device to confirm one’s identity when making a payment. The risk for a mobile payment won’t be as strong as a CNP payment, although the extent to which a network will analyze this will vary by design. You may still be liable for some of the safety and security needs surrounding the transactions you’re completing.

The Difference Between CNP and CP Deals

The costs to process a CNP mobile payment and a card-present or CP transaction are slightly different. You can expect to spend at least 0.2 percent more on a CNP transaction than a CP one. The added security of a CP deal makes it easier for a network to process, especially since the risk won’t be as dramatic.

What Does a Reader Cost?

You’ll require a separate card reader to accept mobile payments. A reader that supports NFC signals can cost about $100 or less in some cases. But the cost will vary surrounding whatever choices are open.

Readers don’t have to be bulky or extensive. You could find some mobile ones that can link to a smartphone or tablet. But not all providers will offer these, plus these mobile systems may not be as thorough or have as many features as what a traditional reader may hold.

What Other Equipment Will You Require?

You’ll need various other bits of equipment when accepting mobile payments. These include these devices that every business should include in their work:

  • A suitable reader that can collect contactless payments
  • A mobile POS software program that provides seamless integration
  • A terminal that features a large enough screen to help you review your payment data

Virtual terminals could also work if you don’t want to purchase a full-size dedicated terminal for your work. But it could cost a few extra dollars each month to access a virtual terminal. Not all virtual setups will work with your existing infrastructure. Check with your service provider to see if it can handle whatever you’re trying to run.

Look For the Processor

Your processor will also dictate what you will spend on mobile payment processing costs. Each processor will collect a percentage of each transaction you complete. The cost may go alongside whatever an individual card network will charge for your work.

A processor can include many charges like these:

  • The cost to process each transaction
  • Distinct rates for CNP and CP deals
  • Contact charges, including annual or monthly fees
  • PCI compliance fees
  • Extra equipment charges, including for cases where you lease your equipment

Take note of how you’re getting a processor to help you with your mobile payments. Be sure whoever you hire is transparent in what one provides. Avoid long-term deals and stick with options with no obligations if possible. Don’t bother with leases either, as they may be too expensive and won’t allow you to keep the equipment for yourself.

Mobile payment processing costs can vary, but they will be worth exploring in any situation. Look at how well you’re going to manage your payments and how you will collect money from your clients. You can get more from these transactions if you plan everything well and you know what you will use when getting these transactions running well.

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