Study: Get ready for mobile wallets

Study: Get ready for mobile wallets

The data is pouring in on mobile payments, and it shows that consumers are increasingly amenable -- even happy -- to pay their bills via their "mobile wallets."

A recent Javelin Strategy & Research study, found that consumers are warming up to mobile payments -- as long as their personal financial data is secure.

The study concludes:

• About 33 percent of iPhone users said they were "likely" or "very likely" to use mobile payments. Most study participants also reported that their primary interest in mobile wallets was having access to price comparisons while shopping.
• Approximately 50 percent of those surveyed had reservations about the security of mobile wallets.
• Mobile technology is especially popular overseas. In Japan, mobile contactless payments typically replace cash transactions and range between an average value of $4 and $6.

As the Javelin data shows, it's no secret that "instant payments" are becoming a bigger part of consumers' technology lives, right up there with texting, tweeting, emailing and creating digitized photo albums.

How can small-business owners leverage all that burgeoning enthusiasm and use mobile payments to streamline their operations? Here are a few ideas:

1. Add revenue by establishing a mobile payments system: A 2009 study by Telecoms Market Research estimates that total mobile phone payments reached $68.7 billion worldwide in 2009. Any business that establishes a mobile payments system will get a cut of future (and presumably more than Telecoms cites) revenues.

2. Open up new opportunities via cell-phone payments: Merchants who use mobile apps can expect to be paid more quickly than ever. (Is "instantly" fast enough for you?) By plugging into the smart-phone rage, business owners can also more easily identify consumer buying patterns (with archived records of purchases), tailor marketing campaigns to customers (through specialized coupon and discount programs, such as Groupon.com) and issue buying reminders through social networking sites like Twitter and Facebook.

3. Leverage the credit card mentality: Studies have long shown that consumers will spend more using credit cards than they would if they were just carrying cash in their pockets. It's the same for mobile payments. Consumers can buy your product or service on a whim and pay for it without ever reaching into their wallets or pocketbooks. That's a dream scenario for small business owners.You will be making fewer trips to the bank to deposit cash, but you will still have more money in your bank account.

4. Pay lower fees: Mobile transactions may not be free to merchants, but they're less costly than the fees that business owners pay via credit card purchases. Studies show that mobile payment fees are about half as much as credit card fees.

5. Get better organized: Sure, you probably have a customer relationship management package for your business, but it's not likely one that you can carry around when you are traveling or out making sales. Imagine lining up a meeting with a "big fish" customer and being able to bring up a birthday or buying history just moments before you sit down to lunch. That's the "convenience" corner of the mobile market, and it shouldn't be overlooked.

Mobile wallets are good for your business -- maybe even better than you might have thought. But it's about way more than just payments: Mobile technologies can amp up the sales, marketing and operational parts of your business, too.

See related: Should you switch to a mobile payment system?; Are the security concerns over Square's mobile payment device valid?

Published: May 3,2023