Mobile Payments: The Benefits and Risks of a Digital Wallet.

Technology is on the rise and the world is at our fingertips. It is understandable why businesses are introducing mobile payments into their payment options. Customers want fast, easy transactions that can take place anywhere and anytime. Mobile payments are just that.

Although, there are always pros and cons to consider especially when it comes to technology. let us have a look.

BENEFITS

1.      Convenience

The primary benefit of mobile payments is convenience for both the customers and the business. Customers have the option to make payment transactions from anywhere and anytime, which makes their life easier, simpler, and most importantly contact less.

Businesses on the other hand, are benefiting by receiving the extra amount of data which in turn allows them to reach out and understand their customers better. Extra customer information gets stored into the company’s database which can later be used to introduce loyalty programs and rewards.

2.      Reduces Expenses

Mobile payments are done virtually, removing the costs of tangible expensive sales equipment needed. Paper and ink costs will also be eliminated as there is no need of payment receipts when it comes to mobile payments as the confirmation is done via an email or text message.

Further, with the help of such payment methods businesses can get their hands-on actionable data. Extra information being stored in the company’s database gives us insight into a customer’s purchasing data. Informing businesses about their most popular and least popular items, leading towards a more sufficient supply.



RISKS

1.      Adoption

Virtual payment methods although are convenient but still many stores and services have not made this method available as they do not want to risk any information, they simply do not have the right equipment or infrastructure to support this method. Methods as such need to be supported by updated hardware meaning, the business would need to invest in new model terminals and/or smartphones that support NFC.

2.      Compatibility

One of the biggest drawbacks of digital wallets or virtual payment methods is that there is no guarantee of them being able to work on all types of devices. There are some specifics for example, Apple Pay will only work on Apple phones, tablets, and smartwatches. Whereas Samsung Pay only works with Samsung devices and Google Play will work on any Android devices but not on Samsung smartwatches.

To conclude, there are various types of payment methods out there such as, SMS-based transactional payments, contactless near field communication (NFC), and virtual smartphone wallets. Mobile payment methods hold immense growth and have the potential to increase sales and customers.