Mar 10, 2014 Dave King
Within the past couple years, mobile payment technology has been introduced to consumers at many businesses. These systems are meant to improve the customer experience, but people haven't jumped all over mobile payments just yet.
However, the 2013 MasterCard Mobile Payments Study revealed that 81 percent of people who were having conversations about the technology on social media were "adopters," compared to 32 percent in 2012.
Security still remains a concern, but merchants have shifted the marketing focus of mobile payments from why you should use them, to which option should be used? Businesses that have yet to adopt this technology should consider doing so or risk falling behind the competition. Mobile payment systems come with numerous benefits, including:
Improve customer incentive programs: One of the most important things to a merchant is its incentive and loyalty programs, as this is what keeps customers coming back. According to Open Forum, mobile payments can help improve these programs by eliminating the need for punch cards and key ring tags. Instead, loyalty programs can be implemented directly into a mobile application that is able to keep track of purchases, rewards and send out coupons based on a person's purchase history. If this is able to increase the customer return rate, revenues may rise, which is beneficial for the merchant.
Track customer trends to improve inventory: A challenge that faces merchants on an every day basis is making sure product is in stock. If it isn't, that leads to lost money, as people who come to the store for that product can't make a purchase. Simply not having one product in stock could lead to a customer not buying anything at the store. Through the use of mobile payments, merchants can improve inventory data. Being able to track what people buy, can help businesses stock product that is purchased most frequently. For example, if a sub shop sells a lot of steak and cheese subs on weekends, it can have extra materials in stock during these times.
Increase checkout speed: One goal of every merchant should be to get customers through the line as fast as possible. Each person that is able to check out means more money for the store. Mobile payment systems can help speed up check out times, as they don't have to get out their credit card, swipe it and wait for approval. Instead, the purchase can be made on a mobile device, which was probably already in their hand. Fast check out times can lead to customers return, potentially increasing store revenues.
Keith Garabedian, owner of Hot Diggity in Philadelphia, told Open Forum that mobile payments have helped is business immensely.
"By using mobile payments, we can move customers through the hot dog shop quicker," he said. "During a busy lunch we can serve 250 customers if we keep people moving."
Cut down on credit card fees: Every time a credit card is swiped, a business incurs a fee. At a busy store, these can add up quickly. While there is still a charge for mobile transactions, it is often less than that of credit cards. For this reason, businesses would be wise to make this an option available to consumers, as it could end up saving them money in the long run. One popular mobile payment system - Square - charges 2.75 percent of each transaction, which is lower than most credit card fees.