Mobile payment use is expanding rapidly online and in stores. According to the Payment Security Observatory at the Bank of France, mobile payment use increased by 137% from 2021 to 2022. For French businesses, it has become important to support mobile payment options to accommodate customer preferences and enhance the purchase experience.

This article explores what mobile payments are, how they work and their pros and cons for businesses in France.

What's in this article?

• What are mobile payments?
  
• How do mobile payments work?
  
• What are the main types of mobile payments?
  
• What types of businesses support mobile payments?
  
• What are the pros of mobile payments for businesses?
  
• What are the cons of mobile payments?
  
• How Stripe can support mobile payments for your business
  

What are mobile payments?

Mobile payments, also known as m-payments, are payment methods that allow customers to make purchases or complete transactions using a smartphone or smartwatch. This modern, flexible method is considered safe and secure and simplifies the payment process for both the customer and the seller.

Several types of mobile payments are used in France, including digital wallet payments, quick response (QR) code payments, payments via banking apps and closed-loop payments, which use the company's own app or card.

How do mobile payments work?

Mobile payments rely primarily on two technologies: near-field communication (NFC) and QR codes. The first is used in contactless payments, while the second requires customers to scan a code to initiate and finalise a transaction.

NFC technology

NFC technology can be found in the chip of most bank cards. It supports the contactless transfer of data between two compatible payment terminals. Digital wallets or e-wallets such as Apple Pay, Samsung Pay and Google Pay rely on NFC technology for mobile payments.

When using mobile payments, the customer chooses the card they want to use and holds their phone or mobile device against the point-of-sale (POS) terminal. They then confirm the transaction using their digital fingerprint, facial recognition or unlock code. To make a purchase online, the customer selects the digital wallet card and confirms the transaction directly from their mobile device.

QR codes

QR codes are typically generated by the business. The customer uses their phone's camera to scan the code and process the transaction. This mobile payment method is especially popular in China via WeChat Pay and Alipay. It's convenient and works both in stores and online, making remote sales easier.

What are the main types of mobile payments?

Mobile payments can be made in several ways: by e-wallet, banking app, peer-to-peer (P2P), text message, email or closed-loop payment. These methods all offer flexibility for customers.

Digital wallet (e-wallet) payments
Digital wallet payments are becoming increasingly popular with customers. According to Crédit Agricole, 40% of online shoppers in France regularly use this mobile payment method. To pay using a digital wallet, customers simply add their bank card to the mobile payment service app. The e-wallet saves card details and allows the customer to make online and in-store purchases using NFC technology, QR codes, Bluetooth or contactless beacon technology.

Banking app payments
Customers can use their bank's mobile app to make payments directly. These apps are often combined with other mobile payment services. For example, a bank account might be used as a payment method in an e-wallet.

P2P payments
P2P payment apps such as Wero allow users to transfer money between accounts in under 10 seconds. These apps are convenient for transferring money between individuals. Entering the recipient's phone number is all that's required to process the transaction.

Closed-loop payments
Businesses often develop their own mobile apps to promote customer loyalty. These apps allow customers to make payments and claim rewards and discounts.

Text-to-pay or email payments
Businesses can send customers a payment link by text message or email, allowing them to pay from their smartphone.

What types of businesses support mobile payments?

Most businesses in France that conduct in-person or online B2C or B2B transactions support mobile payments. M-payments facilitate transactions for brick-and-mortar stores, e-commerce sites, vending machines, small businesses, freelancers and subscription-based service providers.

Brick-and-mortar stores
An increasing number of retailers accept mobile payments through their integrated POS systems. This gives customers an alternative to traditional payment methods and speeds up the payment experience for both parties.

E-commerce sites
Online stores often offer this payment method to customers shopping on their mobile devices.

ATMs and kiosks
Many vending machines and kiosks are now mobile payment-enabled, allowing customers to pay with their smartphones.

Small businesses and freelancers
Mobile payment solutions make it easy for small businesses to accept payments, usually through P2P apps.

Subscription-based service providers
Mobile payments are convenient for recurring payments, allowing customers to manage their subscriptions from a mobile app.

Mobile payments aren't restricted to commercial activities. Restaurants, movie theatres and theme parks can also integrate mobile payments into their systems to facilitate transactions. The same goes for charitable organisations and transportation services.

What are the pros of mobile payments for businesses?

Mobile payments are a fast, easy, secure way to pay. When used correctly, they offer businesses many advantages, enhance the payment experience for customers, increase business and make payments more secure.

• Enhanced customer experience. Mobile payments speed up checkout, cut down wait times and promote customer satisfaction and loyalty. They can also enhance a business's image, positioning it as an innovative, forward-thinking company.
  
• Expanded customer reach. Businesses that support mobile payments can target a wider customer base, including those who prefer digital payment methods over cards or cash.
  
• Improved customer analysis. Mobile payment platforms regularly provide companies with detailed analyses of their customers' transaction habits, preferences and purchasing behaviours. This data allows businesses to create and refine sales strategies and customise their marketing efforts based on specific customer segments.
  
• Lower transaction costs. In general, mobile payments are free of customer fees. Some traditional card payments might be subject to fees.
  
• Superior security. Mobile payment platforms comply with stringent security standards that protect both the business and the customer. They often rely on advanced security features such as tokenisation, dynamic encryption and biometric authentication to lower the risk of fraud and data theft.
  
• Increased sales. The convenience and speed of mobile payments can help increase sales and conversion rates.
  
• Loyalty program integration. Loyalty programs can be integrated with mobile payments to promote repeat purchases.
  
• Contactless payments. Contactless mobile payments are more sanitary than cash or card transactions.
  

What are the cons of mobile payments?

There are some downsides to mobile payments, including the technology required, which might prevent some companies from adopting it, put off some customers from using it or lead to occasional malfunctions.

• The digital divide. Customers who don't have a smartphone can't use mobile payments, which widens the digital divide and excludes some customers.
  
• Equipment. Mobile payments only work if the customer's device is turned on and connected to the internet. Some retailers still don't have contactless payment terminals.
  
• Up-front costs. Setting up mobile payments could require investing in infrastructure.
  
• Adoption. Customers used to traditional payment methods might be hesitant to adopt mobile payments. That's why it's important to promote awareness of the benefits, especially in terms of security.
  
• Security. Despite their advanced security features, mobile payments are not without risk. It's important to use a comprehensive fraud detection and prevention system.
  
• Technical issues. Mobile payment systems can experience outages or failures.
  

How Stripe can support mobile payments for your business

Stripe Payments optimises mobile payments for businesses with online and in-person operations.

Compatibility with mobile
Our software development kits (SDK) for Android and iOS make it easy for businesses to incorporate Stripe into their mobile apps. Stripe ensures a secure mobile payment experience compatible with popular digital wallets such as Apple Pay and Google Pay.

International payments
Stripe's global network allows businesses to process transactions through a local acquirer. This helps reduce transaction costs, increase authorisation rates and promote customer reach around the world.

Fraud detection and prevention
Stripe Radar automatically detects and blocks fraudulent transactions. Businesses can also customise their security settings with Stripe.

Automation
Stripe's APIs and webhooks automate a wide range of payment processing tasks, improving efficiency and helping businesses increase their revenue.