Mobile payments will generate around $190 billion in transactions by 2021, says Statistica. Now is an ideal time to start accepting phone payments at your business if you don’t already.

Keep reading to learn about why and how you should let your customers pay with phone.

What does it mean to pay with phone?

Paying by phone refers to any option a business gives customers to make mobile payments. The option lets customers pay for goods or services with a mobile phone.

Primitive mobile payment technologies allow a customer to use a regular cell phone. More advanced technologies demand the use of a smartphone.

Cash, cards or checks do not need to exchange hands at the point of sale. But a card can get charged or bank funds transferred during a sale.

What are the advantages of letting customers pay with phone?

Businesses in every industry are letting customers pay with phone because:

  • It’s portable. Customers can pay with phone from anywhere and at any time. They don’t have to be behind the checkout counter of a store during set business hours.
  • It’s quick. It avoids the need for customers to wait in long lines to bring home the goods they need. Plus, there’s no need to rifle through a wallet for a credit card or write out a check. Transactions can thus take a matter of seconds rather than minutes.
  • It’s clutter-free. It reduces purse and wallet bulk by eliminating the need for physical cash, cards or checks at the point of sale. Furthermore, it reduces the need for customers and merchants to count coins or return change. Consequently, paper waste is reduced for the merchant since there is no need for printing paper receipts.
  • It’s secure. The use of encryption in mobile payment systems protects sensitive customer data. It also reduces or does away with the need for merchants to carry large cash stores on-site. Researchers have linked the decline in cash use with lower rates of crimes like robbery.
  • It can streamline your accounting process. Certain mobile payment systems have built-in features to track sales, returns or expenses. This can improve the accuracy of your existing accounting method.

What are some options for paying by phone?

Below are a few major methods by which a customer can pay with phone. Each of them leverages different technology. This means that merchants need to put in place a different infrastructure for each. By the same token, customers will interface with each option in a different way.

  • Near field communication (NFC) payments. This method enables contactless payment between your phone and an NFC-enabled payment terminal. The customer only needs to tap his phone over the terminal from a close range to transact. An example includes Square’s NFC Reader.
  • Mobile wallet payments. Products like Apple Wallet let customers upload digitized versions of their payment cards. The customer needs to pull up a digital card on his phone. He then has to tap the phone over a mobile-wallet-ready NFC terminal.
  • Quick response (QR) payments. A QR code is a machine-readable code that contains information about a store item. A customer has to launch an app with QR scanning capability in his phone. The Best Buy app is an example. At checkout, the customer scans in the QR code that the merchant presents for the item. Then, his stored payment method supplies the payment.
  • SMS payments. SMS payments are payments made via text messaging. The customer has to text a 5- or 6-digit “shortcode” to the payee as a request to get charged. The price of an item will then get charged to the customer’s mobile service bill.
  • Web payments. This method lets customers check out on his phone through a web-based payment portal. The portal should be mobile-responsive to ensure smooth transactions on small screens.
Manasa Reddigari

Manasa Reddigari

Manasa Reddigari is a freelance technical writer and small business owner whose insights have appeared in diverse digital publications. She has a passion for leveraging technology to reveal simple solutions for everyday business finance complexities. Visit to learn more about her work.
Manasa Reddigari

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