Mobile Payment Processing Costs
What You Need to Know
A decade ago, the idea of paying for a purchase with your mobile phone was too futuristic to contemplate fully. However, now the future is here, and your customers want to pay with mobile devices. You want to keep your customers happy, although you also want to make sure you do it in the most cost effective manner. And you’re unfamiliar with how much it costs to process mobile payments. Read on to learn about what you’ll pay to process mobile payments to make an informed decision.
Three Mobile Payment Technologies, One Way to Pay
There are three separate technologies that power mobile payments.
The first is near field communication (NFC). NFC is a wireless data transfer method that enables objects to transmit information without an Internet connection. It’s one of the most popular methods of mobile payments, because many mobile devices have an NFC transmitter built in.
Barcodes and quick response (QR) codes are a less common method of mobile payments. A customer simply scans a barcode or a QR code, and the cell phone or tablet communicates with the merchant’s point-of-sales system to transmit the payment information.
Another method is cloud-based mobile payments. The cloud allows merchants to store data on virtual servers, eliminating the need for hardware investments. When a customer makes a purchase, data is encrypted (turned into an unbreakable code) and sent over the Internet.
How Much Does It Cost to Process a Mobile Payment?
There’s no single answer to the question of how much it costs to process a mobile payment, because there are three technologies that enable mobile payments.
Payments made through NFC are the most costly, because they’re linked to a credit card. Many payment processing companies treat NFC payments as “card not present” (CNP) payments, meaning that the merchant can’t access the physical credit card, and there’s a greater risk of fraud.
QR code and cloud-based payments cost less to process, for two reasons: either they’re linked to an electronic financial transaction network known as ACH, or they’re associated with a proprietary pre-funded card. However, as mentioned earlier, NFC technology is the most prevalent. Apple and Google have both created mobile wallets that rely upon NFC technology, and they’re the manufacturers of two of the most popular mobile device platforms on the planet.
As more people use mobile wallets, perhaps payment processing firms will begin treating these transactions as “card present” rather than CNP. It will save merchants money, and they can pass those savings along to their customers.
Power Pay Payment Processors: Your Payment Processing Experts
Do you want to learn more about accepting mobile payments? Contact Power Pay Payment Processors today. We offer the latest merchant terminals to accept contactless payments. Our rates are the lowest in the industry, and we don’t charge any hidden fees. With Power Pay, you can start accepting mobile payments in as little as a day! Call us at 1-800-483-8815 to find out how we can help you.