Do you accept mobile payments at your business? If not, you could be missing out on a valuable—and growing—source of income. Although some 61% of small businesses admit to having cash flow problems, many aren’t taking advantage of smartphone technology to accept payments from customers.
Small business owners and mobile payments
Today, there are more and more ways to pay than ever before—so many, in fact, that it can get a bit overwhelming. According to a new survey by TSheets, nearly eight in 10 survey respondents accept cash and more than six in 10 accept credit cards, but just 29.05% say they don’t accept any form of mobile payments. Why?
Some 38.08% say they are happy with their current payment options, 19.48% say they don’t have the technology to accept mobile payments, 11.92% think it’s too complicated and 6.69% believe it’s too expensive. In addition, about 13% express concerns over security and fraud.
Risks of not accepting mobile payments
If you don’t accept payment in the way that your customers want to pay, you could be cutting yourself off from potential income. Even if you are happy with your current payment options, that doesn’t mean your customers are.
I still remember once years ago when I was on vacation and found a cool souvenir I wanted. Unfortunately, the business owner didn’t accept any credit cards (he told me he didn’t want to pay the transaction fees), and I didn’t have enough cash on me to buy the item. I still regret not being able to take home that memento and recall being irritated that the shop owner cared more about saving a few cents than making a sale.
No wonder the primary reason that small business owners in the survey say they accept mobile payments is that it’s convenient for their customers (27.14%).
According to The Future of Money, 63% of U.S. millennials rarely use cash. But it’s not just millennials who are turning to mobile payments. A study by Zelle reports consumers of all ages are now using digital peer-to-peer (P2P) payment apps such as Zelle and Venmo, and this growing comfort with mobile payment apps is extending to businesses, too.
By 2020, in-store contactless payments (including mobile wallets) are projected to hit $2 trillion, accounting for one-third of total in-store transactions, according to Juniper Research. The most popular payment methods are those built into smartphones—Apple Pay, Google Pay and Samsung Pay, the report found.
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Reasons to accept mobile payments
Customers aren’t the only ones who benefit when you accept mobile payments. Nearly one-fourth of entrepreneurs in the survey say they like being able to accept payments anywhere, anytime. In addition, 18.33% say accepting mobile payments is convenient for them, while 8.69% say it helps improve their cash flow.
Among those who do use mobile payments, the most popular option is PayPal, which 76.19% use, followed by Apple Pay (30.36%), Square (26.67%), Google Wallet (23.10%) and Venmo (21.43%). Zelle, Android Pay and Samsung Pay are each used by about 18% of those in the survey.
As consumers increasingly rely on payment cards and smartphone apps rather than paper money, if you’re still sticking to cash out of some misplaced fears or worries about costs, you’re shooting yourself in the foot.
Concerned about risk? Accepting mobile payments is actually just as secure as using EMV chip credit cards. The apps use tokens to encrypt the information during transmission and the consumer’s payment information is never stored.
Concerned about costs? When deciding if a particular mobile payment option is right for your business, it’s important to be aware of all the fees involved. Consider factors such as the volume of transactions you’re likely to be processing, the size of the average transaction and the setting in which you take payments (a brick-and-mortar store or on the go).
The reality is, there’s a cost to every type of payment acceptance other than cash. However, the benefits in reaching a wider customer base, increasing transaction size and capturing sales you might otherwise lose far outweigh these costs. Ultimately, the more types of payment options you accept, the more options you have for making a sale.
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