Alternative payment solutions aren't the wave of the future - they're the here and now. Numerous surveys illustrate just how common mobile wallets, wireless money transfers and other non-cash means of payment have gotten, and retailers have responded by servicing customers' payment preferences in short order.
However, as with any change, there's an adjustment period that comes with alternative and integrated payments. This is especially true as it pertains to the verbiage that is tossed around by those who are more familiar with mobile payments.
Consumers have taken a shine to mPOS.
Here are five key terms that can help you as a business owner expand your integrated payments lexicon.
If you break down the actual word into parts, omnichannel is almost self-explanatory. In short, omnichannel businesses provide their customers with the ability to purchase goods and services through virtually all avenues, be it online, in person, by phone or through apps, among others. The overarching goal of omnichannel retailing is to synchronize the shopping experience so buyers have the same type of buying access in one medium they would have in another, whether physically in-store or online.
Not only is omnichannel retailing beneficial for customers, but it's a business-friendly strategy as well, as studies have shown shoppers tend to spend more compared to those who only have one channel. According to the Harvard Business Review, omnichannel shoppers spend an average of 4 percent more than single-channel shoppers every time they buy, and 10 percent more online. Additionally, the more payment channels they use, the more they tend to buy, when compared to individuals who only have one channel available to them, such as in-store.
Omnichannel also refers to the ease with which the buying experience lends itself, or as Frost & Sullivan defines it, "seamless and effortless, high-quality customer experience that occurs within and between contact channels."
2. Mobile POS
Point of sale is a term so commonplace that it's typically replaced for its POS abbreviation. Any POS system that isn't tethered to a singular location falls under the mobile POS umbrella. This includes pay at the table, a POS that an increasing number of food establishments have adopted. Consumer-facing options like pay at the table and other mobile POS technologies increase convenience for both customers and service providers. Indeed, nearly 80 percent of consumers in a 2015 National Restaurant Association survey indicated as much. Seventy percent also felt that this type of technology at restaurants resulted in more efficient service and greater accuracy.
Mobile POS also improves the pay for restaurant staffers. As reported by CNBC, a number of food establishments that use mobile POS have found diners will often tip more generously, largely because of its convenience and the speed with which customers can pay and be on their way.
3. Cloud POS
Cloud computing has become increasingly popular since the modern version of the technology was introduced in 2006. Because the cloud enables users to store massive amounts of data, nearly two-thirds of small businesses in the United States, Canada, Australia and the United Kingdom run at least some of their company's operations in the cloud, TechRepublic reported from an Intuit study. That's up from 37 percent of companies in 2015.
Given its accessibility, cloud POS is a system that more businesses are adopting because it allows companies to access their POS from virtually anywhere. Cloud POS is also highly integrated, accepting numerous payment forms, including gift cards, as well as points from rewards and loyalty programs, Entrepreneur reported. Additionally, cloud POS is extremely secure, to the point where businesses are often turning to the cloud because of the protection it offers compared to on-premises storage systems, noted Joshua Greenbaum, analyst for Enterprise Applications Consulting.
To put it as simply as possible, tokenization relates to swapping out one piece of information for something else, mainly due to the security advantages that this strategy fosters.
Cybersecurity breaches have become increasingly common, as hackers will stop at nothing to outwit security installations. Though tokenization, however, these attempts can be foiled because the data they're after has been replaced with unique identification symbols that serve as substitutes for the real thing. As noted by NerdWallet, the principle is similar to what tokens serve in an arcade or casino, as proxies for actual money. This way, should sensitive information fall into the wrong hands, the data can't be used because its "value" is exclusive to the arena in which it operates. This is one of the reasons why integrated payments systems are effective because tokenization is traditionally utilized to strengthen security measures.
Tokenization and encryption are often used interchangeably. While they are both related to security, encryption is a much more nuanced process that converts massive amounts of information into a mathematical code through the use of an encryption key. Also, unlike tokenization - which typically stays in the same silo - encryption is used as a means to protect data during the transmission process.
While this list is hardly exhaustive, these five key terms should provide you with a solid base of integrated payment verbiage so you're more familiar with the lingo.