Mobile Payments FAQ

Mobile Payment 33746096

What are mobile payments?

Mobile payments are payment transactions that customers conduct from their smartphones. Customers use an app on their phones to transmit payment to the retailer to complete the transaction.

How do mobile payments work?

Retailers who can accept mobile payments have an NFC-enabled device that can communicate with the mobile device to transmit payment information.

The signal is actually a radio frequency that talks to one another when nearby. The customer only needs to have the phone within a few centimeters of the system to conduct payment. No one has to touch the user’s phone and no credit cards need to change hands, which makes it more sanitary to exchange payment information.

How can you set up mobile payments?

It’s easy to set up mobile payments on the customer’s side. Just add your card (whether Visa or Mastercard) to your payment app. When you checkout at a store that accepts mobile payments, you hold your phone up to the NFC-enabled device.

This takes the place of swiping or inserting a credit card. Customers hold their phone up to the retailer’s payment system and the mobile phone and payment system ‘talk’ and exchange payment information. Some retailers also accept mobile payments online.

Are mobile payments safe?

Like contactless payments, when customers make a mobile payment, there isn’t payment information that exchanges hands. Instead, the payment information is tokenized for one-time use. This makes it safer than traditional credit cards because hackers can’t replicate a one-time use token (if they do it won’t be any good), but they could replicate a credit card.

What is a mobile wallet?

Your mobile wallet, just like your physical wallet, is a place to store your digital credit cards. Consumers download their mobile wallet app of choice and enter their payment information. When they want to pay for something, they open the app and pay.

Are mobile wallets secure?

Most mobile wallets require some type of authentication beyond opening the app. Most commonly, they ask for your thumbprint or facial recognition before allowing payment. This helps reduce the risk of stolen payment information if a phone is stolen.

What are the most common mobile wallets?

For the iPhone, the most common mobile wallet is Apple Pay and for Android, it’s Google Play. Other mobile wallet options including Samsung Pay, PayPal, Xoom, and Circle Pay.

What are the benefits of a mobile wallet?

Mobile payments are fast and secure, which helps retailers increase their customer base. Customers love the speed at which they can check out either at the counter or on a mobile POS. It decreases the line and lets customers get in and out of stores faster.

Customers also love the security of the mobile wallet. With a lower likelihood of the information being stolen, customers are more likely to use mobile wallets.

From the retailer’s perspective, mobile wallets help keep more customers and they cost retailers less money. Since retailers don’t need and EMV processing POS, they can have simpler systems that accept NFC, saving them money.

What other ways can you use mobile payments?

While paying at a brick-and-mortar store is the most common way to use mobile payments, customers may also use them for peer-to-peer payments. The most common peer-to-peer payments are the exchange of funds between friends or paying someone for a Craigslist sale, for example.

Can you add more than one card to your mobile wallet?

Each app is different, but most allow you to add more than one card to your mobile wallet. This gives you options when you check out at a store.

Are all POS systems mobile wallet enabled?

No, if you want to accept mobile payments, make sure you talk to your payment services provider. They need to determine if your POS is set up to take mobile payments. You must also opt into the service with your provider. Your provider must make sure all PCI compliance is taken care of and that you are set up to accept these secure payments.

Can mobile wallets do anything else besides accept payments?

Many retailers offer their loyalty program as a mobile wallet program. Some retailers also offer some of their business information as a part of the app to provide a more seamless experience for their customers.

What caused the surge in mobile payment use?

The United States was one of the slowest countries to adopt mobile payments until COVID-19 hit. Now everyone is looking for ways to minimize exchanging any items to reduce the risk of transmission. It’s the virus that causes the surge in the use of mobile payments. While (hopefully) the virus won’t be around forever, it’s safe to say that mobile payments will.

Do businesses need to accept mobile payments?

While it’s not a requirement, there are many benefits for businesses to accept mobile payments. IF you don’t, many customers won’t use your business simply because they want a safe way to transmit payment.

While it used to be more of a convenience and many retailers didn’t switch over yet, now it’s a necessity because of the customer’s desire to not have any contact with retailers.

Does it cost merchants more money to accept mobile payments?

No, once retailers upgrade their equipment or add a mobile payment reader to their existing POS, there are no other charges. Payment processors prefer mobile payments because of the lower risk of fraud, so they don’t charge more for the transactions.

The lower risk of fraud occurs because payments are tokenized. If a thief were to get a hold of a person’s token, they couldn’t use it as it’s a one-time use and contains none of the actual card information.

Can customers use a smartwatch to pay?

Yes, mobile payments aren’t just through a mobile phone. Users can pay with their smartwatches too. It works just like the phone with the mobile wallet and running the watch past the NFC reader within a few centimeters of it.

Save Time, Money, & Resources

Categories

Payment Processing

Contact HMS

Ready for the ultimate credit card processing experience? Ask us your questions here.