Just as the growth of the internet has spawned a host of new ways we interact with each other and business, so too did the smartphone change our behaviors. One of the ways that we are still seeing evolve is the development of mobile payment systems that allow smartphone owners to pay using apps on their phones.
While the concept is still in its early days, with less than 20% of users taking advantage of it, there are early indications that it is poised for huge growth. If you have an e-commerce site or any kind of online business, are you ready for the next evolution in payment? This may be as big a change as credit cards were, and may impact business and how we sell. Here are some points to keep in mind about the mobile payment revolution in selling and buying.
Three Types of Mobile Payment Systems
The first thing to understand is that there are three types of payment systems. Each of them work a bit differently although there ae some vendors, such as AltaPay, who do work with all three methods.
- Commerce Payment Options – This is your typical website store. Customers will enter your website, go to the webstore, add what they want to buy to a shopping cart and pay for it at the end. Product is paid for and delivered.
- Mobile Payments – We are beginning to see this a bit more in restaurants and some stores. This is where a customer uses contactless payment from a mobile phone in a physical location. There is usually a PIN involved and whatever is purchased is taken at the time by the customer.
- Mobile Wallets – This is getting big in Europe and China. It is still in its early phases here in the U.S. for with this kind of payment everything that you would normally carry, including ID and credit card information, is carried in a type of digital wallet that you then use for payments and identification.
Mobile Payments and Social Media
Another big player that has emerged from this growing trend is how social media is getting in on the action. Right now, Facebook as created an ability for users to purchase directly from the social media site, using digital purchasing power that is similar to mobile payment applications. Expect to see more social media sites jump on the bandwagon as Facebook has a history of creating new applications for emerging trends and then seeing other social media sites copycat their offerings.
As more and more of the younger viewers on these sites learn to purchase what they see offered without having to leave their sites, more social media sites will see the value in making this option available. The growth of advertising on social media sites such as Facebook mean that for many businesses that focus their sales growth online, creating a marketing campaign that includes social media marketing will become crucial to their success.
What About Security?
While this is seen as an area for great growth, there are a few key issues that must be faced by developers before it can truly take off. The most important of these is security and the earned trust of users.
The current big names in the evolution of digital payment such as Square and Venmo will continue to evolve the security of online payments. New players will bring their own solutions. Success is just a matter of time.