Technology research firm Gartner predicted a large jump in mobile payment users from 2010 to 2011, from 38 million to 141 million. Even so, Gartner researchers believe mobile payments may still be over a half-decade away from mass adoption.
There are a number of circumstances holding back consumers from adopting mobile payments, most of which involve changing how customers think about paying retailers in the store and on the web. Retailers can help this adoption. They should act now and educate themselves about the payment methods, the technology behind them and the implications for both consumers and retailers, alike.
To help retailers, here are some frequently asked questions about mobile payments:
What are mobile payments?
Mobile payments are transactions made via cell phones. The benefit of these payments is that they can take place anywhere and everywhere–wherever the customer has a cell phone. That means mobile payments are great for the web, print advertising, TV advertising or a pop-up retail store. There are a number of different technologies that currently process or are being developed to process these transactions, including: scanning retailers’ branded mobile apps, using near field communication (NFC) payments with services such as Google Wallet, setting up an optimized mobile website that can complete orders, and SMS-text / direct billing payments.
How do mobile payments benefit consumers versus using credit cards?
The main selling point of mobile payments is its ease of use–consumers have their phones handy, why not process transactions with them? In addition, considering over 5 billion people have a phone in the world, that means few will be unable to make a purchase when you offer mobile SMS-text or direct-carrier payments. Additionally, customers can easily pay for these transactions–they just show up on their monthly carrier bill.
How can mobile payments work with branded mobile apps?
According to a PayPal study, Cyber Monday 2011 saw a 552 percent increase in mobile retail traffic. Retailers can take advantage of this trend by ensuring customers can process transactions through branded mobile apps.