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While there are various types of mobile payments, the phrase “mobile payments” typically refers to payment transactions performed with a mobile device. Mobile payments allow businesses to take in-person payments with an app downloaded by a customer to their phone.1

A growing market of consumers is clamoring for businesses to accept mobile payments, so your business should consider the advantages of adapting this technology.

Some of the more common mobile payment technologies you may be familiar with are Apple Pay, Google Pay and Samsung Pay, and these apps are usually already built into smartphones.


There are several mobile payment types a business can use:

  • Near-field communication (NFC) payments – NFC payments are mobile-based, contactless payment systems that link a mobile device and to an NFC-enabled card reader.
  • NFC payments commonly rely on a “mobile wallet”, a virtual wallet that stores credit or bank card information on a mobile device. To use it, a customer opens the wallet on their phone, and “taps” the business’ card reader, like they would with a physical credit card.
  • Quick response (QR) codes – QR codes are two-dimensional, black and white square codes that are scanned with a customer’s phone camera or a QR code scanner. Once the code has been scanned, a link in the phone’s browser opens, asking for payment confirmation.
  • Magnetic Secure Transmission (MST) payments – MST payments use “magnetic” signals to generate a connection between a mobile device and a point-of-sale (POS) terminal. This mobile payment method imitates a physical card being swiped through a card reader.
  • When customers hold their devices against a POS terminal, the phone emits a signal similar to the magnetic strip on a credit card.
  • This system currently only works with Samsung devices, so you can be missing out on the market share of those with Apple devices.


Benefits to your business accepting mobile payments

Increase sales volume – You may be losing sales if you don’t give customers the option of paying with smartphones. Research shows that users of mobile payment methods spend twice as much as non-users.2

  • Improve the customer experience with convenience – With mobile payments, you’re reducing the time your customers spend waiting in line, providing for quick and easy customer service.3 Other staff members can also spend more time serving customers.
  • Improved cash flow – A business or company can get paid by its customers in real time with mobile payments.4 Business can also reduce costs and better evaluate their cash flow.5
  • Access to customer data – Your business can manage and track customer data more efficiently, and that data can in turn be used in targeted marketing campaigns or for promotions, delivering a more personalized experience for your customers.6


The Risks of Mobile Payments

  • A business’s outdated technology – Mobile payments are typically less expensive than traditional point-of-sale systems, but they still require new hardware, such as a terminals or smartphones that can be used for technologies such as Near Field Communication.7
  • If you have an older credit card terminal or you don’t own a smartphone, you can’t accept mobile payments. You also need a strong internet connection and other up-to-date technology to process mobile payments.
  • Differences in smartphones – Since there are a variety of mobile devices and operating systems, like Android and iOS, and thousands of networks, you may need different payment solutions.
  • Chargebacks to your business. Mobile payments don’t eliminate the risk of chargebacks to businesses, so before moving forward, know what you’re getting, your best options and how much it’s going to cost you.8


Don’t forget! Merchants also offers an app for paying your bill with us!



1, 3, 8. The Motley Fool

2. Retail Dive

4, 6. The Fintech Times

5. Entrepreneur



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Erica Dalton

Merchants Insurance Group

Merchants Insurance Group sells its products through a network of more than 1,000 independent insurance agents in Massachusetts, Michigan, New Hampshire, New Jersey, New York, Ohio, Pennsylvania, and Vermont. We sell our products through independent insurance agents because we believe they provide value to policyholders through their broad range of products and their insurance expertise.