Google Wallet has been around for years, but it had a rocky start as wireless carriers, retailers, and credit card vendors all limited its usefulness. Apple rolled out Apple Pay late last year and through 2015 we have seen Android Pay and Samsung Pay launch to some early success.
We also just heard Apple Pay will be coming to Australia and Canada by the end of 2015.
Given the enthusiastic support of the two primary smartphone platforms, the fact that people carry their mobiles just about everywhere, and the security improvements provided over traditional payment methods, mobile payments are here to stay.
Should your business take advantage of mobile payments in your B2B transactions? Let’s take a closer look.
Payments between businesses are carried out primarily through paper checks, credit card transactions, or ACH payments. Checks can be lost, forged, or stolen. Credit card numbers can be stolen and used for a period before the theft is realized.
With mobile payments, a tokenization system is used at the point of the transaction so that the buyer’s account number is never revealed to the seller. The token is changed for each transaction so that a high level of account security is maintained.
The buyer also has to consciously make the purchase with intent as the mobile payment system requires one, or more, forms of authentication. This can be through a PIN, fingerprint scan, or other means of verification. Apple and Google now offer standardized fingerprint scan system-wide support to ensure security protocols are enforced.
Pros and Cons
There are several ways that mobile payments can help your business-to-business transactions, including:
- Increase efficiency and timeliness of payments: Current systems require personnel to initiate and then process payments while also requiring time to verify payments before the payment is considered complete. With faster payment acceptance, you should be able to also perform better cash flow planning and reporting.
- Reduce costs of dealing with paper and reduction in lost checks: Paper payments require time and money to send, are not closely tracked through the entire processing evolution, and sometimes are lost. Lost payments result in more time required for both the buyer and seller to resolve.
- Increased customer convenience: Customers are mobile and providing them with the ability to make payments while on the road, at trade shows, and away from the office when they realize they need your product can result in their satisfaction and possibly more sales for you due to the convenience.
- Increased security of payments: As detailed earlier, mobile payment security is provided in a number of ways.
- Centralized payment tracking: If a primary mobile payment system is set up, then all payments can be tracked and monitored quickly and easily.
Mobile payments don’t happen overnight. There are challenges to implementing a mobile payment system for your business.
A few challenges include:
- Require terminal systems and methods to process mobile payments: Your business will need to research, evaluate, approve, and implement a mobile payment system. This may require devices to process payments and a modified infrastructure to manage mobile payments.
- Integration into existing accounting systems is required: Businesses have established accounting systems so implementation of a mobile payment system will require that you integrate mobile payments into the existing accounting system. Change is not easy, but the benefits could outweigh the costs in the case of mobile payments.
- Marketing and awareness of the mobile payment system to clients: This may not be a massive effort as consumer awareness and use of mobile payments increase with advertising and support provided by Apple, Google, and Samsung.
Tips for implementation
As your business considers mobile payments as an option, there are a few tips that may make the process better for your company, including:
- Accept multiple payment methods: While you could see success with iPhone business owners by just supporting Apple Pay, you are also then limiting your client base. Try to at least provide support for both Apple and Google payment systems.
- Check with your bank: Banks are actively supporting and embracing mobile payments with most of the major players already supporting Apple Pay and Android Pay. Check to see which your bank provides and work with them to implement the best solution for your business.
- Contact and discuss with financial solutions consultants: Depending on the size of your company and the experience of the accounting department, you may want to reach out to a financial consultant who has been through this exercise with other companies. They can help walk you through the process and implement the system that best fits your needs.
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