Your customers are mobile—that’s not news. Smartphones, tablets and other devices have untethered them from their desktops and laptops. And mobile technology has opened up new ways to connect, browse and shop. And let’s not forget mobile payments. What’s being referred to as “digital wallet” and other terms, means that customers’ method(s) of payment are in their devices, largely smartphones, not in currency or even credit cards. Paying for something at the point of sale is increasingly as easy as holding a phone to a reader. Done!
So mobile customers are driving the need for businesses to offer digital payment alternatives. At first, mobile payment technology was seen as primarily a boon to small and micro-businesses and solopreneurs. With it, these businesses could easily increase their sales by being able to take credit card payments on the fly. True, the ability to accept credit cards anywhere, is a huge plus. And offering customers the payment choices they want is a must.
But those aren’t the biggest advantages mobile payment technology bring to small businesses. The biggest advantage is getting paid quickly! Which, in turn, helps small business owners with one of their most common and persistent issues: cash flow.
If you’re a business that invoices customers after the products are delivered or services provided. Once invoices are delivered, the waiting game begins. If you’re lucky, you’re paid in 30 days, or maybe 60, if that’s what your terms stipulate. But more and more often, these payments take weeks or months longer to collect, as the payers also struggle to lengthen their accounts payable cycles and shorten their accounts receivable. The working capital you so greatly need, meanwhile, sits in the pipeline. Sound familiar?
But mobile payment technology is looking like a real game changer, says wsj.com. Instead of sending invoices and waiting, small businesses can now request and process payments on the spot. For a modest monthly amount and small transaction fees, receivables become working capital, within a day.
Business owners have choices, too. One of the most popular: Mobile card readers that let you swipe credit and debit cards on your smartphone. There are also choices in online billing software that automate the entire billing/collections process. Then there’s a photo-card processing iPhone app (Flint Mobile, Inc.) that enables instant payment processing just by taking a picture of a customer’s credit or debit card digits.
Mobile payment technology is here and growing. Roughly half the retailers surveyed last year by the National Retail Federation (NRF) said they’ll use a mobile device as a cash register within a year to 18 months. That’s compared to around 6 percent using them now. The potential dollars are big, too: Worldwide, mobile payment transactions are expected to top $600 billion by 2016, more than triple 2012 totals.
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