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5 misconceptions about mobile payments that could hold your business back

Market growth is significant, but like many cultural and technology shifts, misconceptions about the viability of mobile payment apps holds some businesses back from implementing powerful tools that can propel brand awareness, provide beneficial insights about their operations and have a positive impact on growth. So let’s set the record straight.

July 17, 2015 by Tal Nathanel — Co-Founder and U.S. CEO, MyCheck

The U.S. mobile payments industry is on fire — growing rapidly as it continues to be integrated into many market sectors. Sixty-one percent of consumers think mobile payments will be useful for mass transit, sports arenas and restaurants while 63 percent believe they will replace credit cards. While less than 0.5 percent of global users made mobile payments last year, approximately 10 percent are expected to do so in 2015, according to Deloitte. What’s more, it is projected that U.S. consumers will drive mobile commerce revenue to 50 percent of digital commerce revenue by 2017, according to Gartner.

Market growth is significant, but like many cultural and technology shifts, misconceptions about the viability of mobile payment apps holds some businesses back from implementing powerful tools that can propel brand awareness, provide beneficial insights about their operations and have a positive impact on growth. So let’s set the record straight.

MYTH:  Mobile payment apps are only useful for purchases

Mobile payment apps do much more than facilitate payments; they are also a powerful tool for driving brand awareness and engagement. Restaurants can automate loyalty programs, link dining purchases to consumption and integrate mobile payments into the POS system. For example, each purchase is automatically tallied and when a customer has met the threshold needed to redeem a restaurant reward, it automatically appears on their phone as well as the POS. This removes the variable of human error and gives the programs greater immediacy for the customers as well as the restaurant. A mobile payments app not only enhances the guest experience, but it’s also a powerful way for restaurants to extend their brand. A single branded app that offers a variety of payment options from Apple Pay, PayPal, Google Wallet, debit or credit cards and provides the convenience of ordering ahead, splitting and paying the bill and tracking rewards serves multiple purposes for both the consumer and restaurant. 

MYTH: Mobile payments are not secure

In questioning how secure mobile payments are, skeptics tend to focus on the security breeches associated with traditional credit cards, and assume newer solutions struggle to maintain compliance with security standards.

Viable mobile payment apps meet PCI compliance standards. In addition, they may use a one time, encrypted code that is entered or transferred into the POS for processing the transaction, so credit card information is not transferred through the merchant’s POS when a transaction is made.

MYTH: Mobile payments hinder business operations

The opposite is true; mobile payment applications enhance operations.  In the restaurant industry, since the technology is integrated into the POS, mobile payment apps enable servers to tap into information on their customers’ past consumption and dining preferences with real-time upsell opportunities. In addition, a frequent activity like splitting payments is simplified, as customers don’t have to rely on a waiter to do the math, but can now instead choose which items and amounts they want to pay for right on their smartphones. Because loyalty programs can be automated, the potential of human error and loss associated with manually entering redemptions or punching rewards cards is eliminated. And a wealth of insights and analytics are available to restaurant owners that can help guide better decision-making around menu offerings, promotions, staffing and optimal hours of service, for example.  

MYTH:  Mobile payment apps are the domain of the IT department 

IT can make sure that the technology will work in the existing environment and complies with company protocols, but for companies to experience the full benefits mobile payment apps can offer, they must integrate the solution across many business departments and functions. Marketing is a key stakeholder that can utilize the app as a platform to obtain unique customer insights, fueling targeted programs based on consumption and guest preferences as opposed to generic loyalty programs. Operations also has a key role in providing critical feedback on how to implement mobile technologies in ways that optimize the guest experience and streamlines server interaction.

MYTH:  Mobile payment apps are too expensive

Mobile payment applications do not have to be costly. There are companies offering competitive pricing points for a variety of services. Businesses need to inquire about varying options, and the differing levels of service associated with each tier. In some cases, there are pay-as-you-go transaction rates based on volume sales.

The adoption of mobile payments is growing, inevitable and a win-win for consumers and the businesses that understand they are secure, cost-effective and bring significant value not just in the visibility and efficiency they bring to operations, but as a platform to unite cross-company initiatives. 

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