Choosing the Right Mobile Payment Option

Merchant Warehouse |

February 21, 2013

Choosing the Right Mobile Payment Option

The phrase "mobile payments" continues to build recognition both with business owners and consumers. However, while many individuals might be using the same term, what they are actually talking about can vary greatly. For some mobile payments refers to Near Field Communications (NFC), while others look to mobile applications on their phones that leverage Bluetooth or QR codes, and some merchants have taken to using the term to describe processing credit cards through their mobile devices. Regardless as to which method you are referring to, merchant and consumers are still left with the end question of "Which Mobile Payment option is best for me?".

We did a little research on some of the high profile options available on the market today, and with a little help from the Flying Spaghetti Monster (along with Malcolm Gladwell and Howard Moskowitz), provide a guide on how your individual preference can lead you to the best fit for your needs.  

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How To Choose the Right Mobile Payment Option

Mobile payments include a wide variety of payment options that can be completed with the help of a mobile platform. Near Field Communications (NFC) technology is popular when it comes to mobile payments, but it is also possible for consumers and merchants to utilize QR codes or Bluetooth capabilities to complete a transaction. Some merchants even use mobile phones to process credit card payments when traditional credit card readers are not available.

The Basics

Mobile payments are certainly becoming popular among consumers and merchants. Over 16 percent of the merchandise sold on Black Friday was paid for with the help of a mobile device. The use of mobile payments has risen by over 40 percent since 2011, and annual expenditures related to mobile phone payments topped $170 billion in 2012.

Experts estimate that $1.3 trillion of annual payments will be made via mobile device by 2017. Studies show that 8 million households that frequently used the Internet also used mobile devices to pay bills, and these studies revealed that 720,000 households that infrequently used the Internet used mobile devices for bill payment purposes.

The Rise of Mobile Payments

Half of people feel that mobile payments are ideal because of the time savings offered by this option. The convenience of on-the-go bill payment and the ability to make payments at any time of day also ranked high when consumers cited their reasons for choosing mobile payments.

Mobile Solutions

There are many mobile payment solutions that are already in use. Consumers who become aware of the various types of mobile payment options are able to fully utilize a mobile device for personal financial management.

Carrier billing allows consumers to pay via text. The cost of the product or service is then added to the user's mobile bill.

  • NFC allows consumers to swipe their mobile device in order to make a payment. Widespread use of this technology has been halted by the lack of NFC readers on the market.
  • Apps that are available on mobile devices can be used to scan a barcode for payment processing.
  • Merchants sometimes use mobile card readers to accept payment. The reader can be used in conjunction with a mobile device to provide low-cost credit card processing abilities.

Expanded Mobile Payment Options

Consumers may be missing out on all that their mobile devices offer in terms of payment options. There are several options available that are not routinely utilized for the benefit of both consumers and merchants.

  • Google Wallet uses NFC technology for payment processing purposes. A mobile device can be tapped against an NFC reader to complete the payment process. Discover has joined with Google Wallet to allow consumers to store their credit card information in the app, and a select number of retailers accept Google Wallet payments.
  • Square allows merchants to process payments and share information related to their business through a mobile platform. The payment option processes over $5 billion annually.
  • LevelUp is an app that works in conjunction with QR codes. These codes can be used to pay for meals at a restaurant, and approximately 3,000 restaurants can currently accept payment through QR codes. A digital receipt is issued upon payment.
  • GrubHub is available in major cities in the U.S. Users can order food for delivery and pay through the app.
  • PayPal is ideal for on-the-go payments to merchants. It can even be used to send money to family and friends.
  • Bump is a quick way for PayPal users to send money to friends or family members. Funds are transferred through this app.
  • Dwolla acts as a prepaid debit card. Users can load money to an account in order to transfer funds or make a payment. There are currently 8,000 retailers across the country that accept Dwolla as a form of payment.