When the first mobile payment was rolled out two decades ago, no one would have predicted that the trend would take the world by storm a few years down the line. By 2015, the global mobile payment revenue was $450 billion, and the figure is projected to surpass $1 trillion in 2019. Mobile payments are becoming more and more popular among mobile phone users, and unlike in the past where this mode of payment was mainly used for online purchases, in-store payments are also going mobile with technologies such as beacons and NFC. By 2020, for example, the value of proximity mobile payment transaction in the US alone is estimated to exceed $314 billion.
Reasons behind the rise of mobile payments
Increased adoption of mobile wallets
The introduction of Apple Pay on Apple smartphones back in 2014 spurred the rise of mobile wallets, and now we have several mobile wallets such as Microsoft Wallet, Samsung Pay, Android Pay, and Google Pay. The inclusion of these wallets on most smartphones today and the growing number of smartphone users in the world largely contributes to the prevalence of mobile payments. For example, more than 80% of Americans were reported to own a smartphone in 2017, and since a vast majority of them bring their devices with them everywhere, they can easily make payments on the go.
Mobile Payments offer more security to consumers
The modern consumer feels more at ease with mobile wallets compared to walking around with cash or even smart cards. Most smartphones present consumers with biometric technologies such as fingerprints and facial recognition which they can use to step up the security of their mobile payment systems. By installing such security features, consumers eliminate the need for passwords which can easily leak or get stolen.
The prevalence of contactless payment terminals
As consumers continue to adopt mobile wallets and use their smart devices to make payments, most brick-and-mortar stores are also updating their payment terminals to keep up with the trend. An example of such technology is the use of beacons in retail stores which allows customers to pay for items from any location in the store using Bluetooth devices. Another example is the use of NFC chips in checkout terminals to enable customers to make payments by just holding their mobile phones near the terminal. However, unlike with NFC, the beacon technology does not require the customer to be at the checkout terminal hence one does not have to endure long queues in a crowded store. The convenience of this technology, its security, and ease of use has greatly fuelled the rise of mobile payments.
Banking services are increasingly going mobile
Most consumers are now comfortable with mobile wallets and payments, and this has forced banks and credit unions to avail their services on easy-to-use apps that customers can install on their mobile devices. Such services include cash transfers, bill payments, currency conversions, and more, which enable consumers to access and manage their finances effortlessly from their smartphones.
Mobile payment systems can easily be tied to loyalty programs
Most retailers are now integrating their in-store mobile payment systems with reward programs. This encourages most customers to use their mobile devices to pay for in-store purchases since they can easily earn points every time they make a purchase, and the rewards are also easily redeemable.
Consumers are looking for convenience and speed, and it is indisputable that mobile payments will continue to thrive. It is therefore crucial that retailers keep up with trends such as contactless payments to remain relevant in the overly competitive sector. To learn more about our mBeaconPay and mBeaconSAM solutions and how you can use them to automate your check out terminal and improve customer service in your store, talk to us.