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Mobile payments for small business

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The GoCardless content team comprises a group of subject-matter experts in multiple fields from across GoCardless. The authors and reviewers work in the sales, marketing, legal, and finance departments. All have in-depth knowledge and experience in various aspects of payment scheme technology and the operating rules applicable to each. The team holds expertise in the well-established payment schemes such as UK Direct Debit, the European SEPA scheme, and the US ACH scheme, as well as in schemes operating in Scandinavia, Australia, and New Zealand. See full bio

Last editedMar 20222 min read

With so many tech-savvy consumers these days, small businesses can only benefit from accepting mobile payments. Fewer people than ever carry cash, and new alternatives to traditional credit and debit card payments are being developed all the time.

Investing in mobile payment solutions for small business is already necessary in order to stay relevant for a growing number of customers. Customers want the businesses they buy from to support their preferred method of payment, whether it’s chipped cards, Apple Pay or any of the other mobile payment solutions. Most businesses won’t find it necessary to integrate every single mobile payment solution, however. That’s why it is important to understand the options and choose the most suitable solution for your business.

Here we will explain how mobile payment systems work and describe the contenders for the best mobile payment app for small businesses.

What are mobile payments?

Mobile payments generally refer to any transactions performed via a mobile device, although there are different types of execution. Ultimately, they allow businesses to conduct digital payments in-person rather than accepting cash, credit cards or cheques.

The transaction of a mobile payment is usually performed via an app downloaded on the customer’s phone that links with a dedicated terminal operated by the business. The main three types of mobile payment system are:

Near-Field Communication (NFC)
Quick Response (QR) Codes
Magnetic Secure Transmission (MST)

Near-Field Communication (NFC)

NFC payments are contactless payments between a mobile device and an NFC-enabled card reader. They work using radio-frequency identification (RFID), exchanging encrypted data to process the transaction.

Quick Response (QR) Codes

QR codes are the black-and-white square codes that can be scanned by a phone camera or dedicated scanner, then decoded. An app facilitates the transaction, asking for confirmation of the payment before processing it. Usually the merchant will provide a QR code for the customer to scan, with the app producing a new QR code for the merchant to scan and complete the transaction.

Magnetic Secure Transmission (MST)

MST payments work via magnetic signals that generate a connection between a customer’s mobile device and the merchant’s terminal at the point of sale. It works similar to swiping a physical card through a card reader by emulating the magnetic strip on credit or debit cards.

Mobile payment systems for small business

There are lots of major mobile payment systems that small business owners should be aware of. We will describe the five most popular. They are:

PayPal Here
PaySimple
QuickBooks GoPayment
Square
Stripe

PayPal Here

The PayPal Here mobile payment app enables businesses to use PayPal’s online payment methods from their physical locations. The app accepts a variety of credit and debit card payments, and also has a cash and cheque recording feature to keep all the day’s earnings in one place.

PaySimple

PaySimple is both a mobile payment solution and a transitional merchant services provider. The app accepts credit and debit cards as well as e-cheques, plus the extra services enable you to create and manage invoices.

QuickBooks GoPayment

As a point of sale and mobile card reader app, GoPayment POS allows businesses to process transactions via both iOS and Android devices. The app accepts all major credit or debit cards and bank transfers, as well as Google Pay, Apple Pay and Samsung Pay.

Square

Square payments can be made via an app, a physical card scanner or a point of sale system. The accepted payment methods include all major credit and debits cards.

Stripe

Featuring multiple transaction methods and extra features, Stripe accepts credit and debit payments, bank transfers, in-app payments, subscription billing and mobile wallets.

We can help

If you’re interested in finding out more about mobile payments for small business, or any other aspect of your business finances, then get in touch with our financial experts at GoCardless. Find out how GoCardless can help you with ad hoc payments or recurring payments.