Why Mobile Payments Are Great For Startups
Starting a business involves many variables — like demand for your products or services, potential profit margins, and monthly expenses. Though you can predict and plan for them to some extent — they’re not necessarily within your control. Because the price of uncertainty is critically high for a startup, your best line of defense may be the tools proven to help boost sales potential, cash flow and customer experience — like mobile payments. Here’s a look at why this payment technology has become so popular in the small-business community, and how it can benefit your startup.
You don’t need to buy additional equipment
PewResearch data indicates that nearly two-thirds of Americans are smartphone owners. As a result, the device you likely already own and rely on to communicate professionally and personally can quickly become a device for accepting mobile payments, once you establish a merchant account with a mobile payment processor. If you wish to equip multiple members of the team with the same capability, they too can process customer payments on their mobile device by way of your mobile payment processor’s secure app, or a dongle (often provided by the payment processor free of charge) that plugs into a mobile device’s headphone jack. Because mobile payments give customers the options to receive a payment receipt by email or text, you may be able to forego the purchase of printers, ink and/or receipt tape, too.
You can accept payment anywhere
Mobile payments equip you to sell anywhere — including trade shows, festivals, pop-up events, and even a client’s site — without requiring that you diminish your professional credibility with handwritten payment receipts, or risk losing sales by accepting cash only. While mobile payments do require a secure Wi-Fi connection to process payments, many have the ability to hold the transaction processing in queue until a secure online connection is established.
You can better control your cash flow
Your startup business needs a steady stream of cash to build the financial stability required to grow, and survive sales inconsistency —especially in the first few years when you may have limited access to business capital and financing. Mobile payments allow you to collect what you’re owed from customers as soon as work is complete, giving them the flexibility to pay how they prefer. If a customer is experiencing cash flow issues of his/her own, the option to pay with a credit card may mean the difference between collecting the money you’re owed for your services, or writing the work off and absorbing a financial loss.
Spend more time generating revenue — and less on business errands
Optimize where you focus your effort by eliminating the necessary but time-consuming business tasks, wherever possible. Because most mobile payment processors electronically transfer the funds you’re owed to your bank account (less their transaction fees) within 72 hours after transaction approval, you can minimize the amount of trips you make to the bank to deposit checks — and eliminate the risk that a customer’s check isn’t backed by sufficient funds. Based on the customer’s preference and what you sell, mobile payments may also minimize the amount of invoices you must prepare.
You can execute streamlined loyalty programs
One study cited by TechnologyAdvice.com revealed that 82% of consumers said they were more likely to shop at a business that offered a loyalty program. However, managing loyalty programs isn’t always a simple process, especially for small businesses with limited resources. Many mobile payment providers now empower merchants to incorporate customer loyalty programs directly into their payment processes, automatically applying discounts or rewards earned during checkout. Not only does the feature simplify how customers redeem rewards, the digital nature of the programs can eliminate punch cards and plastic key tags altogether.
Mobile payments are a tool that can benefit businesses of all sizes — but they’re an especially good fit for businesses in their first few critical years. By improving how you’re able to generate consistent cash flow, manage expenses, and provide a positive customer purchase experience, you can better prime your startup for short-term success, and long-term sustainability.