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Mobile payment technology, such as a making a payment with a wave of your phone, is steadily gaining ground among consumers who desire a convenient way to make purchases. Just how prevalent has this payment method become? According to a 2016 Federal Reserve report:
With all those customers using mobile payments, are small businesses prepared to accept them? In a recent PNC Bank survey of small business owners and executives, most accepted multiple forms of payment:
What is a mobile payment? Instead of paying for goods and services with cash, check or credit/ debit cards, individuals and businesses today can transfer funds electronically from their debit/credit card or bank account to the vendor by using a smartphone, tablet or wearable device (watches, for example). This includes using your phone to pay for something in a store, waving your smart watch at a checkout counter with a contactless terminal, as well as payments made through an app, a mobile web browser or even a text message.
“Accepting mobile payments gives small business owners some distinct advantages,” said Matt Steenson, head of PNC Business Banking. “In addition to meeting changing consumer preferences, accepting mobile payments also may help owners mitigate the risk of fraud and grow their enterprise.”
If your business has not yet adopted this kind of technology, Steenson identifies key benefits that just might persuade you to make the leap:
Cyber-hacking has become a very real threat to consumers and small businesses alike. Having your point-of-sale system compromised can be disastrous, especially if it causes customers to refrain from doing business with you again.
Accepting mobile payments can help alleviate some of the risk. Rather than storing customers’ credit card numbers, commonly called “card on file,” mobile payment apps use a one-time-use code or token to secure information. Instead of providing the actual card number, the payment app creates a unique code that is associated with the customer's card.
Loyalty programs are a good way to encourage repeat business, and incorporating mobile payments can create an enhanced user experience for your customers. But syncing the two together makes it even easier for shoppers to track rewards they're earning through the program. To take your loyalty program to the next level, you could incentivize customers by offering special discounts or rewards for choosing to pay via their mobile device.
Getting to know the people who are patronizing your business is important for identifying patterns in how often they spend and what they buy. Mobile payment technology allows small business owners to analyze customer data and identify the most significant trends. That information can then be used to tailor your marketing and sales promotions. This is another example of how syncing mobile payment technology and a loyalty program could pay dividends. Not only can you track patrons who frequent your business, but tracking your customer data also allows you to make personalized recommendations for products or services based on a particular customer's previous purchase history.
Additionally, linking your mobile point-of-sale system with an inventory management software can help you keep tabs on inventory trends. That can make it easier to plan ahead, so you're not running short of a particular item during a peak sales period.
Accepting mobile payments can give your business an edge over the competition and help to increase sales. But the ultimate goal is to make it easy for your customers to pay you, no matter what type of payment they prefer – cash, check, credit card, mobile payments or automated clearinghouse (ACH). Based on your customer base, you may select a comprehensive solution from a single partner that helps you accept both traditional and mobile payments, or select a la carte options from an array of vendors. Shop and compare solutions for the best payment acceptance solution for your business and your customers.
Learn more about PNC’s digital and mobile payment solutions for small businesses »
Among those mobile phone owners who reported making mobile payments:
According to the Federal Reserve report on Consumer and Mobile Financial Services 2016, consumers expressed interest in performing the following activities with their mobile phones (if available):
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1. Consumers and Mobile Financial Services 2016: https://www.federalreserve.gov/econresdata/consumers-and-mobile-financial-services-report-201603.pdf
2. Fall 2017 PNC Economic Outlook, National Results
These articles are for general information purposes only and are not intended to provide legal, tax, accounting or financial advice. PNC urges its customers to do independent research and to consult with financial and legal professionals before making any financial decisions.
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