While cash used to be the dominant form of currency, over the years things have changed tremendously. Gone are the days of paper currency. While cash isn’t dead yet, younger generations don’t use it as much as older ones.
In fact, one in four millennials carries less than $5 in his or her pockets. For this new type of consumer, online payment methods are considered to be more practical, expedient, and, best of all, easy to manage.
For small business owners, however, accepting payments in new ways can be confusing. Fraud and security-related issues might make you s reluctant to receive payments through mobile apps, but to keep up with the advent of new technologies and accommodate how your customers want to pay, you should welcome change to allow for growth and expansion. Here are some tips and reasons you need to consider why accepting all forms of payments means success for your business.
With Apple Pay, Android Pay, Samsung Pay, Square Pay, and many others, nearly all smartphones have the ability to make payments today. It is predicted that by the year 2020, the number of mobile payment users in the U.S. alone will reach a whopping 150 million, which accounts for almost 56% of the consumer population. And when it comes to the mobile point of sale revenue, Juniper Research discovered that by 2021 this is expected to reach the $50 billion mark, meaning that one in every three POS terminals will accept mobile transactions.
Just like credit and debit cards, smartphones are equipped with specialized software and hardware features that support payments with a single swipe or click of a button. Consumers in the millennial category are the number one users of online payment methods. With rewards and discounts as the main motivational factors, 70% use mobile payments to benefit from such perks.
Major companies are jumping on the bandwagon:
To go one step further, many businesses are moving cashless. There are several benefits, including faster checkout lines, reduced theft, convenient accounting, and appealing to younger generations. If you plan to go cashless, be sure to communicate it well in advance of transitioning. Customers will appreciate the heads up so that they can plan ahead and begin using new forms of payments.
Additionally, mobile and credit card payments work the same way in the chargeback department. As a reminder, chargebacks happen when a customer files a dispute against the merchant for a specific charge of a service or purchase. Generally, the customer will contact the credit card company and ask for reversal charges. If the claim is proven to be valid, your business account will be debited for said credit plus a transaction fee that ranges from $15 to $100.
Since chargebacks happen for both mobile and card-based transactions, don’t let this risk hinder you from offering alternative payment methods. There are easy ways to avoid chargebacks:
Digital payment services have gone from being a futuristic vision to a reality. Tons of online payment methods for small business can be easily acquired nowadays, and the authentication that is used helps prevent fraud.
Multi-factor authentication helps prevent fraud by making sure that the person making the purchase is really who they say they are. For card-based transactions, consumers are usually asked for a PIN or a signature. For mobile transactions, there are several types of ways that consumers are authenticated:
As a small business, you can’t begin facilitating online payment methods without the right tools and equipment. Payment processing using credit cards differs from accepting hard cash and the same thing goes for mobile transactions. Just because your store supports debit and credit card doesn’t mean that your equipment can accept payments from mobile apps.
Payments systems differ, and upgrading your equipment according to PCI DDS Level 1 security standards will help ensure smooth and secure undertakings. Following the PCI DDS standard is imperative to protect not just your customers but your small business as well. Additionally, there are several advantages of upgrading your POS equipment:
Most online payment methods for small business require a steady internet connection to work properly. And since the internet is an essential aspect of every business, using a fast and reliable provider is of great importance.
If you are offering free Wi-Fi services to your consumers, make sure to lock it down properly and require a password, and use a separate Wi-Fi network or a hard connection for your business systems. Follow these steps for a safe online payment system:
Online payment methods are great for small businesses, but they should be safe and secure in order to avoid associated risks as well as liabilities. This is where Cyber Liability insurance comes in handy by protecting your business from fraudulent acts and cyber-attacks.