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3 steps for creating better mobile payment systems

Nov 08, 2013 Dave King

Mobile payments have been labeled as the next big thing in the transaction processing industry for the last several years. Despite experts' predictions that mobile sales would take over the market, progress has not been as significant as many sector leaders suggested.

However, new data from the Credit Union National Association (CUNA) indicated that the market for mobile payments in the United States may be larger than expected. The source found that more than half of American smartphone owners have used their devices to complete some sort of transaction.

This shows that the potential for mobile payments is significant, at least in America. More promising is that individuals appear to be spending high amounts when they use mobile tools. Thirty-four percent of mobile transactions are valued at more than $50, the single most common transaction price.

Understanding what mobile users want when they access smartphone payment systems is essential for any startup or major processing company entering the mobile arena. Fortunately, CUNA's report provided some insight into what makes a great mobile payment system.

According to the survey, 91.6 percent of respondents said ease of use was the top benefit of using mobile pay solutions. This is a clear indication that payment apps and tools need to be as simple as possible.

Instead of including an excessive amount of features, mobile developers should stick to a more simplistic model for constructing payment programs. In fact, The Next Web included the need to design easy to use programs as one of its 11 essential tips to building great apps. Andrew Schrage of Money Crashers Personal Finance told the source that just because a large portion of Americans own a smartphone does not mean they are tech savvy enough to be proficient in using them. Therefore, it's necessary to keep apps as simple as possible, only including the necessary features, tools and functions to complete a transaction.

Secure access
Another important insight the survey uncovered was that mobile users are concerned about security. Of all survey respondents - including mobile pay and non-mobile pay users - 77.7 percent cited security as their top issue regarding mobile access.

Having a clearly defined plan for securing payment technology is integral for processing firms that want to see high mobile adoption rates. Payment companies may want to consult with financial IT experts before crafting a point-of-sale interface. These professionals will be able to highlight and provide solutions for current security threats as well as those that may become more common in the future. Simply put, without a dedication to security, mobile payment channels will likely fail to catch on with consumers.

Better rewards
One of the major deficiencies among mobile payment platforms is that they have poor rewards programs. Just 6.1 percent of respondents to the CUNA survey listed mobile rewards initiatives as their favorite transaction loyalty program. That's much lower than those who listed credit card (41.8 percent) and debit card (25.9 percent) as their favored rewards programs.

In order to convince consumers to make the switch to mobile, processing enterprises need to provide the right incentives. Quality rewards are what makes it possible. Exactly what prizes are included in these initiatives may vary, but CUNA data may indicate that rewards focused on younger consumers could be more viable. Adults between 18 and 44 are more likely to use a mobile payment platform than older generations, so tailoring rewards strategies to their needs and wants may be a good idea.

Although mobile payment tools have yet to see widespread proliferation among consumers in America, these steps will help transaction companies attract more clients.