6 Ways to Accept Payment from Your Customer’s Mobile Phone

Author: Christina Galoozis Date: March 06, 2011

More phone apps

Smartphones are becoming a staple of modern life. They’re our music players, calendars, address books, game consoles, phones and more—all in one tiny computerized box.

And now they can be a method of payment, too. With new technology, people are starting to pay with their smartphones at retail counters and even in B2B settings. It’s just another convenience for people who are increasingly dependent on their devices.

For small businesses, accepting payment from mobile phones can add another benefit for customers—and set you apart from competitors.

Here are your options:


While PayPal is known for helping businesses accept online payments, the merchant service also has its own smartphone app. That means customers can come into your shop and transfer the funds from their PayPal account to yours using their smartphone. Once you confirm that the funds have been transferred, you can hand over a receipt. Go here to get started.

Bank-powered person-to-person payments.

Check to see if your bank’s smartphone app supports person-to-person payments, which are essentially electronic transfers between two bank accounts. ING Direct and Wells Fargo both have apps that allow these real-time transfers. However, this method usually requires sharing your business’s bank account number with the payer, which might be acceptable in a small B2B setting, but not in a retail environment. One alternative: Tell customers to add your business to their list of electronic bill pay recipients and allow them to “pay the bill” while they’re in your store.

Services such as MobilePay USA or BlingNation.

If you sign up with a service like MobilePay USA or Bling Nation, your customers can pull up an app on their phone to pay you. Here’s how it works: Once you ring up a customer, he or she selects your store from a list on their phone (it knows where the customer is by geolocation technology) and the customer clicks “pay” and then enters the amount. An alert comes up on your POS system that payment has arrived. The customers can link their account to any type of funds—a bank account, credit card, debit card, and so forth. Your business doesn’t need to purchase any additional software or hardware for these services, but must give up a small commission on each purchase.

A proprietary smartphone app.

Earlier this year Starbucks released its own smartphone app that allows Starbucks Card members to pay with their mobile phone at checkout. Building a smartphone app may sound like something only large corporations can do, but it’s becoming easier and faster for freelance developers. It might be the best option if your business has a solid base of repeat customers.

Tech check-up.

MasterCard and Visa are also working on their own technology to help smartphone users link their credit cards to their phones. For example, Citigroup has introduced PayPass stickers that, once affixed to the back of a smartphone, can act as a credit card for a customer. Visa is working on a similar program. Check with your merchant processer to make sure you have the most up-to-date “contactless” technology available at your business.

Photo: williamhook

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