Cash, Check or Bitcoin?
New Yorkers will have even fewer excuses for unpaid parking tickets should New York City pass legislation enabling parking offenders to instantaneously pay for parking tickets with Apple Pay, Bitcoin and mobile apps. MarketWatch reported the City That Never Sleeps collects roughly $600 million from 10 million parking tickets annually, even with their increasingly outdated payment system. Proponents of the new legislation hope mobile payment options would further increase that number.
If the option of paying with mobile apps and cryptocurrencies is popular enough with New Yorkers for NYC to consider it, should you be thinking about offering them to your customers?
First and foremost, decide if alternative payment methods are realistic for you to offer by thinking about who your customers are. What generation are most of your customers? What is the general feeling of the area you service? If your customers are predominantly baby boomers and your shop is in a small suburb in Texas, maybe this is something you should wait on. If you’re in the middle of trendy shops, restaurants and millennials, you can’t afford not to adopt new payment practices.
“Definitely consider the costs associated with implementing the technology and think about your customers. If your customers don’t own the right devices, it might not make sense for you. If they do, it could make the purchasing process more convenient,” said David Bakke contributor for Money Crashers.
There are a lot of mobile apps and alternative modes of payment hitting the market today. They all seem to offer something a little different and can easily be overwhelming, despite promising to make life simpler.
Here’s the rundown on some of today’s up-and-coming advanced payment options:
- Apple Pay: “Gone are the days of searching for your wallet, the wasted moments finding the right card. Now, payments happen with a single touch,” the Apple website reads. The company that’s synonymous with literally putting the world at our fingertips with technology like the iPhone and iPad is now responsible for placing the power of contactless payment in our hands. This new technology has probed questions like, “Is it secure? Where can I use it? How do I use it?” from customers and companies alike.
“To implement Apple Pay, companies will need terminals with near field communications technology, something that can be expensive to install, and a lot of retailers still don’t have it. Right now, Apple Pay only works with two versions of the iPhone 6, Apple Watch and select iPads,” Bakke said. “It’s easy to use. Customers simply hold their iPhone near a contactless card reader, and the transaction is processed. For now, I believe the credit card company assumes the transaction cost associated with Apple Pay.”
Apple Pay boasts more secure payments since customers will no longer be sharing their identity, card number and security code when they use it to pay. Instead of using a physical credit or debit card, users will add their desired cards to the Passbook on their device. A unique device account number will be assigned, encrypted and securely stored in a dedicated chip in the user’s iPhone, iPad or Apple Watch. Apple says the numbers are never stored on their servers and when a purchase is made, only the device account number and transaction-specific dynamic security code are used to process the payment. This means there’s never a need for actual debit or credit card numbers to be shared.
If you’ve got a customer base that will utilize it, Apple Pay could be an incentive for your tech savvy customers to do business with you.
- Google Wallet: An easy way to pay in-store, online or anyone in the U.S., Google Wallet works with any debit or credit card on any mobile phone carrier. If you already accept Visa Mastercard, Google says your customers should be able to use their free digital wallet to pay you simply by tapping their phone on the designated reader. Google Wallet stores credit, debit, gift and loyalty card information for users, as well as coupons and other offers, in a free digital “wallet.” Users can send money via Google Wallet to anyone who has an account or Google email address.
“Google Wallet can be added to any iOS or Android device, and it’s fairly easy to implement,” Bakke said. “Customers can complete the checkout process in as little as two clicks. The best part is, there is no fee for accepting in-store Google Wallet payments.”
- Bitcoin: Described as money for the Internet generation, unlike Apple Pay and Google Wallet, Bitcoin is a decentralized digital currency — coins that are sent through the Internet. Compared to other modes of payment, the transaction fees are much lower because Bitcoins are transferred from person to person without going through a bank. After purchasing Bitcoins, users can keep them in their digital wallet either on a computer or handheld device. Bitcoin can be used to purchase anything by opening the corresponding application and scanning the recipient’s Bitcoin address. To learn more about Bitcoin visit: www.weusecoins.com
Understanding your customers’ needs is essential to providing the right services and staying relevant in the marketplace. Know what is trending. Observe what other businesses are doing and how it is being received. Chances are, if the donut shop down the street is benefitting from Apple Pay, Google Wallet, Bitcoin or other unconventional payment options, your customers will appreciate you offering it, too.