In today’s age of digital advancement, new business solutions continue to emerge, and Tap-to-mobile or (Tap-to-phone) is no different. Tap-to-mobile is an innovative solution designed to provide hassle-free contactless payments. This allows customers to pay using mobile wallets like Apple Pay or Google Pay by tapping the mobile. This blog explores this new revolutionary payment option and its prospects in the merchant ecosystem.
What is Tap-To-Mobile?
Basically, Tap-To-Mobile is an innovative payment option that allows merchants to accept payments through a customer’s mobile or smartphone without making use of any hardware like point of sale (POS). This is processed by leveraging Near Field Communication (NFC) technologies that enable the use of mobile wallets such as Apple Pay, Google Pay, or credit/debit cards to make payments.
This payment solution significantly witnessed global acceptance as it is a more easy, safe, and convenient option than the traditional payment options. This payment solution is suitable for almost every type of merchant ranging from small-scale merchants to businesses having large-scale operations.
How Tap-To-Mobile Works?
Tap-to-mobile works take leverage of NFC technologies to facilitate the transaction. NFC is basically a short-range wireless communication technology that enables the transfer of data without the application of any hardware. The safe and secure process of this payment solution involves the following steps:
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Merchant Account
In the initial process, the merchant needs to install any payment gateway software that embraces Tap-to-phone or an app on their smartphone or mobile that has NFC technology. The app will then transform the device into a fully functional Point of sale (POS) terminal.
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Customer Account
Now when, the customer will initiate the payment process by using their mobile wallets like Apple Pay, Google Pay, etc. With the card or app, the customer just needs to tap on the merchant’s device. Just after the tapping, the merchant’s device will instantly receive the transaction details and it will forward it to the payment gateway to complete the transaction.
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NFC (Near Field Communication) Technology
As mentioned earlier, NFC technology refers to a set of communication systems that enables wireless transfer. Other than the payment solution, it allows the exchange of data and digital content also. In a payment solution setup, NFC establishes connections among the devices whose proximity should be under a few inches at most.
The payment gateway of the merchant’s phone verifies the details through secure channels and communication through proper encryption to prevent a breach of sensitive data. After authenticating the data, all the payment details are exchanged instantly between the accounts, and the money gets debited from the customer’s account to that of the merchant after the verification.
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Tokenization
Tokenization refers to the process where all sensitive information like credit card numbers or other card details are replaced with unique token numbers to protect the privacy of the user. With the help of tokenization, even if the sensitive details are intercepted, the fraudster will not be able to use it maliciously as the data will be protected under token numbers. Moreover, the added advantage of tap-to-pay is that the transaction is done through end-to-end encryption which means no third party will be able to access the information.
Notable Payment Gateways that support Tap-To-Mobile
- Stripe
- WorldLine
- GoDaddy
- MasterCard
- Visa
- Square
Notable Mobile Wallets that support Tap-To-Mobile
- ApplePay
- GooglePay
- AmazonPay
- SamungPay
- Shopify
Benefits of TTP to Merchants
TTP technology provides several benefits to micro and macro merchants in their daily business operations. It streamlines the process of payment acceptance in the following manners:
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Functions without Hardware
The great part about TTP is that now merchants don’t need to attach any additional hardware like Points of Sale (POS) terminals. This significantly reduces the expenses of buying and maintenance of hardware, making it a highly budget-friendly payment solution for merchants.
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No additional cost of Adoption
To set up this payment option, it does not require huge funds to set up the TTP option. The merchants can repurpose their regular mobile or smartphone to install any payment gateway that supports TTP to avail of the benefit. This makes it quite accessible to a wide range of businesses that do not intend to install complex hardware setups.
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Portability
As the Tap-To-Mobile is highly portable and easy to set up, it can be used by a diverse range of merchants such as small retail businesses, restaurants & food industries, service-based merchants, and even moving businesses like door-to-door trades. This feature is the principal factor of its wide acceptance as it allows businesses to operate in various locations.
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Low Monthly Cost
Earlier, the traditional methods of POS terminals required expensive equipment on leases. Whereas TTP payment options incur lower charges that too are levied just upon app usage and transaction processing fees. This provides a great relief to merchants, especially SMBs who were struggling to minimize their additional expenses.
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Safety Feature
This payment solution adheres to strict security standards that comply with the PCI Security Standards Council. It makes use of advanced end-to-end encryption and tokenization systems to process safe and secure transactions. Additionally, Tap-to-mobile can integrate with other business solutions like inventory management, invoicing, etc allowing merchants to manage various aspects of their business simultaneously.
Strong Market Demand for Tap-to-Mobile
According to a recent survey conducted by NMI, almost 300 small business owners and 1,000 consumers located near the U.S. and U.K. are strongly willing to adopt Tap-to-mobile payments. Additionally, 83% of the consumers revealed that they would accept TTP if businesses offered them this payment solution. These statistics make it evident that the payment ecosystem evolves along the with advancing business landscape.
Challenges in Tap-to-Mobile technology
Despite having several advantages, TTP has certain areas of improvement. Sometimes, consumers might face NFC limitations as TTP transaction requires both the merchant’s & consumer’s devices to support NFC technology. Merchants having old custom mobile phones may not have these features thus can hinder the process.
Another point of concern is regarding the internet connectivity, as merchants who are very remotely located having no access to the internet might not be able to offer the payment solution. Although the process involves advanced security features, reliance on smartphones may introduce new potential threats.
Conclusion and Way Forward
To stay ahead in this highly competitive world, merchants need to adopt new payment solutions. To integrate Tap-to-mobile in the payment process, enhance device compatibility with NFC features, and install the relevant payment software. Other than this, the focus should be on overcoming internet challenges and understanding security features in depth. Given the current wave of this technology, it can be ascertained that the industry will overcome all the related challenges and will dominate in the future prospectus by providing easier, faster, and more secure payment solutions.