The Difference Between Mobile Payments & Digital Wallets
In 2018, a one size fits all approach does not work when it comes to making payments for goods and services. Of course, there are old-school methods like cash or checks as well as standard credit and debit cards, but today’s mobile friendly society is ushering in an entirely new era of payment solutions.
With payment technology moving at a breakneck pace, it’s important to stop once in a while to review the newest trends and to understand how they work. Mobile payments and digital wallets are the two trends we will analyze in this blog.
Mobile Payments Defined
Gone are the days when businesses were tied to their hard-wired countertop terminals. Today’s mobile technology enables business owners to take their products and services on the road to trade shows, expos, and even door to door with the capability of easily accepting customer credit card payments. These solutions include mobile terminals that have built-in WiFi or a SIM card. Another option are small reader devices that connect to mobile phones and tablets.
In both cases, virtually all types of payments can be taken including EMV credit and debit cards as well as contactless NFC transactions that are connected to a customers digital wallet. At this stage of the development of these technologies, some mobile readers must be upgraded in order to accept payments from digital wallets.
Therefore, it’s important for business owners wishing to adopt these trends to be sure that the equipment they have is compatible with the expanding needs and demands of their customer base.
Digital Wallets Defined
As smartphones become ever more pervasive in our society, consumers are gradually warming to the convenience that using a phone’s digital wallet feature provides. Think of the digital wallet as an electronic storage center where customers can securely keep their encrypted financial information.
The setup process involves manually key-entering or scanning the credit or debit card information into the smartphone wallet software. Once it has been successfully saved, the customer can use their phone to securely make mobile payments via contactless NFC readers. In order to authenticate the transaction, the customer generally uses the phone’s fingerprint scanning feature. Then within a few seconds, the payment is encrypted, authenticated and processed.
Best of all, the customer does not need to carry any cash or a bulky wallet. All that is required is the mobile phone that they already have with them anyway.
Now that we’ve explained the difference between mobile payments and digital wallets, it’s good to once again reiterate that a customer is not required to have a digital wallet in order to make a payment on a countertop or mobile terminal. Most terminals and mobile readers are set up to accept traditional plastic cards.
Customers who remain uneasy about saving their financial data to their smartphone can still make payments as usual. However, using a digital wallet to make a payment is oftentimes faster than using an EMV chip card, which can take time due to the need to “dip” the card and then wait for the card to process. NFC payments with digital wallets with encryption and tokenization are just as secure as EMV cards, but require a simple “tap” on behalf of the customer.
Only time will tell, but it seems very possible that the digital wallet may become the rule rather than the exception in the years to come.
To learn more about the benefits of accepting mobile payments, please contact us today!
Visit us online at www.TailoredTransactions.com or call us direct at (888) 669.1686