Accounting & Reconciling with multiple mobile payment providers
What they mean for business &
how you can reconcile easily.
The growth and popularity of smartphones and smart devices have created the conditions for new payment service providers to continuously expand the payment offering when shopping. The use of the smartphone as a payment method is one such example and has made its way into customer payment services in recent years.
To remain competitive, businesses should accept and implement the newer technologies into their environment so that customers can use their preferred mobile payment methods. This also means implementing systems that support the billing of these new transaction methods. Popular mobile payment service providers serving businesses today in Germany, Switzerland, Austria and across Europe include: Bluecode, Twint,Swish but also the well-known credit cards via Apple Pay, Google Pay or Samsung Pay.
Payments via mobile phones: a growing trend
Paying with smartphone has grown following the advancements in digital banking. An obvious step following online banking trends, especially since online retail sales on mobile phones has been growing steadily over the last few years (see chart).
Contactless and more
Mobile payment channels allows customers to use their mobile phones to make contactless payments for purchases almost anywhere. Customers can use their phones for in-store purchases by holding their phone in front of a terminal or scanning an optical code. Any business large or small can provide this service. The technology is so widespread today that in Europe even parking meters have QR codes on them for payment via an app on mobile phones.
The benefits of using mobile payment services
Growing preference for mobile payments has evolved due to the various benefits they provide customers. Some key benefits include:
> Fast payment - as all important data has been stored and set up for payment,
> Secure payment - with apps and digital wallets using technology that enables payment without compromising private data,
> Convenience - a mobile phone is a device almost every consumer has with them and uses often throughout the day,
> Everything’s on the mobile - The use of the mobile phone has come a long way. It has long since ceased to be just a phone used just for communication, but is also used as a camera, as a computer, for messaging, social interactions, entertainment and of course now for handling payments as well.
The technology behind it
With Near Field Communication (NFC) technology, you can enable mobile phone payments in your business. NFC enables contactless data transmission via radio. The smartphones we are familiar with have long since implemented NFC for payments using the familiar credit cards. However, in order to introduce NFC, your issuer bank needs to work with the mobile phone providers to securely store the payment card data on the mobile phone.
Customers who want to use this option can quickly and easily virtualise their cards to pay via NFC afterwards. Those with an Apple smartphone must use the wallet built into the Apple operating system. Android owners can either use the Google Pay wallet or third-party apps.
Another option is to provide an optical barcode that the customer scans. To pay with an optical barcode, the customer opens the mobile payment app and scans the barcode at the POS terminal in your shop. This app is also already linked to the customer's payment details and the payment is debited directly from their account or card service provider.
Secure mobile payment transactions are essential for both your business and your customers. Today, mobile payments are generally considered secure because no confidential banking information is stored on the provider's device. Instead, a unique code (a token) or encrypted code is used to process the transaction. Of course, losing the mobile phone is a security risk and customers would have to block payment services via the provider's online site in this case to be sure that unauthorised payments are made.
Popular mobile payment providers
Google Pay, developed by Google, enables contactless payment through the app and is compatible with users who have an Android phone and a Google account. Customers' card data is protected with a token containing a virtual card number that is sent instead of the customer and card data. Google Pay gives customers plenty of payment options providing customers the choice to link their PayPal or giro account as well.
Google Pay has a system which ensures transactions are processed securely. Customer card data is kept private with a token carrying a virtual card number, which is sent out instead of the customer’s actual data.
For larger amounts (mostly in online commerce) customers have added security with an activation code requested when the amount exceeds a certain amount.
To protect your business, Google reserves the right to check the creditworthiness of customers through the terms and conditions they consent to when installing the app.
Apple Pay is also a fairly new provider in Europe. Working in conjunction with Apple products, it comes already installed on the iPhone, iPad, Mac computers and Apple Watch. Consumers simply need to activate it and add their debit or credit card information. Once unlocked, the app can be scanned at store counters for payments.
Apple Pay works with the majority of the larger banks and credit card companies. Consumers select their card provider from the list in the app and enter their card details either manually or by scanning it.
To ensure security, consumers must enter an additional code which will be required when using the app for future payments. Similarly to the other providers, Apple also generates a token for each payment to ensure anonymity and secure customer data between their device and merchant processing devices.
Bluecode, TWINT, swish
Bluecode is an Austrian-based payment provider and operates throughout Europe. In contrast, the Swiss app TWINT is designed purely for the Swiss market and is very widespread. swish originates from Sweden and is widely used throughout the Nordics. The payment method of this app works via QR code. They are compatible with both Android and iOS. To pay, the customer unlocks the app and scans the barcode. The amount is then debited from their account.
Reconciling mobile phone payments: advance with automation
Mobile payment services means your accounting department needs to keep track of the terms such as fees, commissions and payment schedule of each payment provider. Additionally, the transaction data would need to be extracted and correctly accounted for on a regular basis.
Automating the process with software such as ReconHub solves this problem plus benefits your enterprise on many levels. ReconHub extracts the data on a regular basis, accounts for all terms and payment delays plus gives you a constant overview of payment flows and highlights issues as they arise. Your accounting department is therefore always up-to-date and can easily follow up on amounts due (open items) and any inconsistencies.
Even though the payment industry is constantly evolving, you can stay abreast of these new payment technologies and trends without leaving any revenue behind. With ReconHub your accounting department certainly has the resources available for accurate and efficient reconciliation.
To learn more about how ReconHub can streamline your reconciliation process, contact us via our contact form!