More and more people are starting to use their mobile devices for shopping these days. A number of people are also starting to trust mobile security using their devices for payments. Businesses are taking advantage of this trend and encouraging their customers to make mobile payments and reduce the costs of sale in the process. If you are an entrepreneur, especially a small business owner, you can cut down the transaction cost by up to 20 percent by switching to mobile payments, according to industry experts.
Retailers Moving to Mobile Payments
The latest buzz in the industry is that retailers are moving in to the competitive and aggressively growing mobile payment market to increase customer loyalty while keeping costs per transaction to a minimum. Many companies, including Apple and Google, alongside banks and credit card companies are launching their mobile payment apps in hope that their app will set the standards in the industry. Apparently, retailers are rushing into the mobile payment market not only to cut their transaction costs but also to offer their customers a maintenance-fee free way to shop online.
Banking on Customer Loyalty
The evolution of mobile technology also helps businesses to reduce the inefficiencies involved in collecting and distributing cash. Apparently, businesses around the world spend a lot of money when taking payments using cash, credit or debit cards and coupons. But if they switch to mobile payments, they can bring down such costs by up to 20 percent, which is a significant percentage.
This in turn will reflect on the costs that the customer has to pay for a product. Retailers can turn the situation in their favor by encouraging their patrons to make mobile payments and also encourage them to stay loyal by offering discounts, and additional rewards for using mobile payment services.
UK Retailers Could Have Saved £463 Million with Mobile Payments
A recent survey by the Center for Economics and Business Research in Britain has revealed that had retailers in the country accepted mobile payments instead of traditional options like cash, credit and debit cards, they could have saved 463 million GBP spent on transaction processing. In Britain alone, 2.5 percent of the amount collected by retailers through cash transactions goes into collecting guarding and distributing the cash. 2 Percent of the total takings go for processing cheque payments and 1 percent goes for processing credit card and debit card payments.
A Matter of Time
While it is true that mobile payment reduces transaction cost, it is going to take a while before retailers can switch to it completely. This is because not a lot of people are still sure how secure mobile payment services are and will need time to trust it enough to use it regularly.
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