A major shift in global transactions is coming.  The rise of payments by mobile devices will be at least as significant as the rise of credit and debit cards, maybe more.  However, it will also be more complicated.

Competing Standards

The competing standards of the credit card world are fairly simple.  Each standard has a brand: Mastercard, Visa, Amex, etc.  However the standards of the emerging mobile payment marketplace are going to be much more complex.

Hardware Standards

There are a few different hardware combinations that can make mobile payments possible.  They are:
Option 1: QR Codes.  This is the simplest way to work mobile payments into your system.  Using LevelUp, you can offer QR Codes in exchange for electronic payments on your website.  Then, you can scan these QR codes from your customers’ smartphones in-store.  This is the cheap and easy option for mobile payments.  It works on the vast majority of smartphones.  In addition, it allows for some interesting loyalty, coupon, and viral marketing campaigns.  However, compared to other forms of mobile payment, it can be a little tedious for your consumers.

Option 2: Mobile Payment Acceptance.  Mobile payment acceptance terminals are point-of-sale credit/debit scanners that plug into mobile devices.  This is vastly cheaper than purchasing a dedicated portable POS scanner, and just as safe.  These will be a worldwide standard within a few years.

Option 3: Near Field Communication (NFC) payments.  NFC is a form of remote communication that sends messages by causing slight fluctuations in a local magnetic field.  The advantage of NFC is that it is undetectable from anywhere other than a few inches of the transmitting device.  This allows for totally secure communications.  NFC is enabled on most new smartphone models.  NFC terminals make it easier for merchants to accept payments.  They also can allow merchants to implement loyalty or purchase tracking campaigns via third party apps.

Competing Software Standards

Speaking of third party apps, it gets even more complex!  There are five main NFC payment apps: Google Wallet, Square, Isis, Serve, and Paypal.  Each app requires a compatible POS scanner.  Disagreements between the developers also mean that it is unlikely that there will ever be a scanner program that works with all of them.  The next ten years might be a little like the early days of the credit card revolution.

However, even with these problems, the mobile payment revolution is underway.

Is Your Business Ready?

Here are some things to get your business ready:

• Make an account with LevelUp and start some small QR campaigns.  One tactic I love is emailing your customers QR coded special deals on special days, like birthdays or holidays.
• If you ever take payments outside of your place of business, invest in a card reader and an iPad.
• Buy an NFC terminal that accepts both Google Wallet and Paypal.  These two should be available to 80-90% of NFC payment users.  Gage consumer use of NFC payments to decide if it’s worth it to add some of the smaller standards.
• Start thinking about ways to use NFC’s customer tracking abilities to your advantage.  If you have any sort of customer reward system, integrate it with your NFC payment system.
• Watch tech blogs to keep an eye on security issues or privacy concerns that may affect your customers.
• Be responsible and do whatever it takes to protect your customer’s personal information.

That’s all!  As revolutions go, this one will be friendly and painless.  Everyone wins: customers, businesses, and third parties.

Post By DJ (14 Posts)

DJ has been a high profile Internet Marketer since 2001. He is the CEO of TechWyse and as a passionate member of the Internet marketing industry is a key contributor on the 'Rise To The Top' and the InstantMobile Blog.

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