The growing reliance on mobile phones is evident. People no longer use their devices for just calling or texting. Instead, smartphones help us to control various aspects of our everyday life, including online purchases.
Mobile payments are rapidly growing in popularity. Digital wallets are designed to make it easier for customers to buy goods and services. It is much more convenient and safer to pay with a cell phone than use a physical wallet.
The increasing number of retailers are integrating the NFC technology, which allows users to complete the transaction just by tapping their mobile phones over the point-of-sale terminal.
Last year, the global volume of mobile payments amounted to $450 billion and is forecasted to reach $780 billion next year. By 2019, the overall mobile transactions are anticipated to exceed $1 trillion.
Mobile payments are set to transform the shopping experience, providing a more secure way of conducting payments. By using the technology, businesses and merchants can significantly accelerate the checkout process, thus serving more customers.
Mobile payment apps enable consumers to avoid paying merchant fees by extracting payments directly from users’ bank accounts. Besides, payments providers offer an advanced level of security, reducing the risk of error or fraud.
There is a growing competition within the industry, with the world’s largest fintech companies developing their own contactless payment offerings. Last year, we observed Samsung rolling out its Samsung Pay in South Korea, Google introducing Android Pay and Apple Pay expanding to the UK.
Meanwhile, Facebook is reportedly planning to integrate a mobile payment option into its Messenger app, providing users with a variety of services.
A few days ago, a digital security company Gemalto and transactional services provider Worldline launched a new mobile payment solution that will let banks to deploy digital wallets with their cards.
In view of the large number of companies entering the industry, banks could face some problems with retaining its customers. People prefer to use mobile payment apps instead of conventional banking services.
In order not to lag behind fintech innovators, banks need to embrace innovations and modernize their transactions processing systems. They could also offer various brand loyalty programs to urge customers choose credit cards over mobile payments. Besides, they need to enhance security, which remain the main concern in adopting mobile banking.
Aside from mobile payments solution, there is another technology that is expected to further simplify the shopping experience. The biometrics authentication technology not only brings new level of security, but also makes it more convenient to make payments. Instead of using their cell phones, users can just place their fingers on the scanner to complete the transaction.
The Japanese authorities have recently announced they are planning to experiment with the fingerprint payment terminals that will replace both cash and credit cards.