Mobile Payments: What’s in It for You?
For years, mobile banking has been top of mind for any institution that is looking to keep pace with the future of finance –– and that future has arrived. Nine out of 10 Americans now own smartphones, and mobile transactions are fast becoming the preferred way to make purchases, particularly among millennial consumers.
There are still a few kinks to work out –– too many platforms with too many players –– but when all the pieces fall into place, mobile payments are going to take off. When that happens, businesses that are not already on the bus risk being left behind.
It’s easy to understand why consumer demand for mobile payment options is rising. It’s convenient; instead of carrying around a wallet full of credit cards and cash, people can leave home with nothing but their smartphones. And the transaction at the register is relatively quick and hassle-free.
Many consumers, however, have legitimate concerns about security breaches via Virus-infected app clones, authentication vulnerabilities, mobile fraud and the like. They also complain that too many mobile platforms are tedious to use, requiring repeated signups and passwords, and too few local merchants accept mobile payments. Studies show small businesses in particular have been dragging their feet. A recent survey of businesses with 10 to 99 employees found only 25% currently use mobile solutions.
Of course, small business owners need to be particularly careful about spending money on new technologies. But the rapid growth in demand for mobile payment options is tipping the scales. Companies that don’t offer this option are likely to see declines in sales over time.
While the most obvious benefit of accepting mobile payments is keeping clients content by offering the convenience they want when paying for services or products, there are bigger gains on the table. Rewards and incentive programs promote loyalty among customers –– and lock them in as repeat buyers. Mobile payment platforms also collect valuable data on user spending habits.
As with consumers, the biggest concern among business owners is security. Transactions requiring interactions among multiple parties are vulnerable to hacking at each interface. Banks and credit card companies need to take a leadership role and invest in stronger web security.
But consumers should be responsible for their own security as well and must take necessary steps to protect their private data. At Apollo Bank, we’re developed a Customer Security Awareness Program that gives our clients practical advice on safeguarding confidential information and protecting against electronic fraud. Awareness, we’ve experienced, is the first step in successful risk avoidance.
Eddy Arriola serves as CEO and Chairman of Apollo Bank, a community bank that operates a network of seven branches throughout Miami’s premier business and residential communities.