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Part 1 – Consumers’ and Retailers’ Guide to Mobile Payments

Payment transaction with smartphone

You use your smartphone for everything – why not use it as a wallet, too? Mobile wallets are popping up everywhere and are expected to become a primary form of payment over the next few years. Major retailers like McDonalds, Target and Staples are already accepting mobile payments and many smaller merchants are following suit to meet consumer demand.

This four-part mobile payments guide explains what you need to know about adapting, the pros and cons of using mobile payment software and the best option for you – whether you’re a retailer, a consumer or both.

Mobile Payment Technology

Mobile payment technologies use either Near Field Communication (NFC) or Quick Response (QR) codes to process payments.

  • NFC: A contactless data transfer system that works similarly to Bluetooth. It transfers between devices that are within eight inches of one another.
  • QR Codes: A digital bar code that is read by a scanner. QR code reader apps are available for free for both iOS and Android operating systems.

What Merchants and Consumers Need to Know

Thousands of retailers accept mobile payments and more merchants are adapting every day. At this rate of adoption, business owners must comply or risk losing customers. To accept mobile payment technology, merchants must update their card reading systems. Many new EMV card readers include this technology and free software is often available for download for point-of-sale (POS) terminals. Certain mobile wallets require additional hardware (scanners and readers), which can cost between $100-$500. Usually, POS terminals can support multiple digital wallet apps so retailers can accept a variety of payment options. Business owners should educate staff on mobile wallets and train them to use the new systems.

Mobile wallets offer multiple perks for consumers and retailers. The technology is extremely convenient. Because it only requires customers to have their smartphone to make a payment, shoppers don’t have to carry as much and they can make purchases even if they forget their wallets. In addition, mobile wallets process payments quickly, which cuts down customer wait time and increases cashier efficiency.

Are Mobile Payments Safe?

One of the most important benefit of mobile payment technologies is increased security. Mobile wallets use tokenization, a system that allows financial information to travel in encrypted tokens that cannot be opened without a decryption mechanism. Tokenization makes it difficult for hackers to steal personal information because it uses unique codes for each transaction and there are no traceable credit card numbers stored in the software or retailer’s software. Consumers simply need to ensure their mobile devices are password-protected to prevent anyone from stealing the smartphone and using it to make a payment.

Mobile payments may soon be the primary method of payment in brick and mortar stores nationwide. Consumers and retailers will find it worth it to put in the time and effort to research, understand and adapt to the technology sooner rather than later.


This is the first of four blog posts in our series on mobile payments. Look for our next post later this month, Part 2 – Consumers’ and Retailers’ Guide to Mobile Payments: Mobile Wallets. Next month we’ll cover mobile funds transfer applications and merchant mobile payment acceptance.


This publication does not constitute legal, accounting or other professional advice. Although it is intended to be accurate, neither the publisher nor any other party assumes liability for loss or damage due to reliance on this material. Websites not belonging to this organization are provided for information only. No endorsement is implied.

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