The Business of Mobile Payments

Thanks to the development of Apple Pay system, making transactions using mobile devices has become an attractive business. In a nutshell, Apple Pay uses NFC (near-field communication) to wirelessly communicate with POS (point-of-sale) terminals that support NFC, with a user verifying a wireless purchase via fingertip on the iPhone’s Touch ID sensor. Other mobile wallet applications consist of use of an app, password, PIN or QR code scans.

It is often the case that retailers do not have POS systems that work with NFC, the technology upon which Apple Pay is created. Although making payments from a mobile device is still evolving, customers have more than a few alternatives for making purchases and paying bills using their mobile devices. These comprise of remote- and proximity-based alternatives, which include browser and message-based purchases, retailers’ own apps, and mobile wallet approaches facilitating contactless or “tap and pay” methods. Hopefully, we will soon see significant consumer and retailer adoption of NFC.

Nonetheless, the rate of acceptance of mobile payments gives a reason for optimism. For example, it now possible to make Apple Pay payments using iPhone 6 and Apple Watch in tens of thousands of shops and restaurants in Finland if the user has a Visa credit card through one of the supporting services of the British or US bank. Apple Pay service works in Finland on the same payment terminals, which can make contactless payment carried out by the Visa Paywave technology. Contactless payment terminals can be found in Lidle and Kesko stores, R-kiosks, as well as several restaurants.

Customers prefer to make transactions using those devices that are within reach and most user-friendly. Put side by side with making payments using a desktop, doing so by the use of a mobile device is turning into a popular method, due to smartphone accessibility. Retailers are the most important actors in mobile payment services in which payment is included in a branded app. By providing a retailer-specific app that focuses on user experience, retailers have realized that they can motivate customer’s behavior.

The retailer-specific apps that deliver dynamic user experiences such as seamless switching across devices are customer-centric and designed with understanding what mobile users consider important. Apps facilitate adding a credit card for easy transactions. Case in point: Starbucks’ mobile app, which allows users to pay from the app and get the food from the store. Nowadays, customers that are using the app are rewarded with the possibility to avoid lines.

There is a potential for consumer awareness and acceptance of mobile payments to grow soon. It is most significant for retailers to recognize and respond to the changing customer behavior. For example, consumers today browse in store but carry out purchases later at home on a mobile device. One way of taking action is by equipping staff with a mobile POS to glance through with customers and allow them to avoid checkout lines.


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