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Millenials and mobile payment

Millenials should supposedly have been the primary users of mobile payment. However, in practice, the theory has proven false. 


Mobile payment is fairly new to the general public 

The concept of mobile payment has been around for a while already. It might indeed sound all new and revolutionary, but that is only because the said technology is currently being implemented on a wider scale than ever before. At the head of the innovation race are the expected tech giants: Google and Apple. Apple’s mobile payment platform – dubbed Apple Pay – was launched in 2014, while Google’s alternative – Android Pay – came to be in 2015. Both work in rather similar ways in the sense that the primary aim of each enterprise is to facilitate payment through one’s everyday handheld devices. Those would include smartphones, tablets, and even smart watches!

Mobile payment is mostly enabled by a technology called NFC – short for Near Field Communication. As suggested by its name, NFC allows data to be transferred without involving any contact between a sender and a receiver. For instance, an NFC enabled device and a Point Of Sales System can exchange data using electromagnetic waves as a medium as long as they are within each other’s permissible range.

A world free from magnetic cards indeed sounds appealing… But is it safe? The dispositions taken by most mobile payment front runners sound secure enough. A big game changer would be the involvement of biometrics. On the recent iPhones as well as on the latest Android flagships, fingerprint authentication is an in-built technology. It has already been implemented as a security device that is to be triggered before transactions on Apple Pay or Android Pay. But what about those devices without a fingerprint scanner? Well, they are stuck with the traditional password or pin entering. However, the just taking out your electronic device and presenting it in front of a point of sales system would still be quicker and easier than searching for a specific card through your bag or wallet, swiping or tapping it, and finally entering the right password.

Millenials fear security threats

While millennials sound like they would constitute the ideal market target for mobile payment providers, they would actually be quite reticent to fully embrace the emerging technology.

Cara O’nions, VocaLink’s director of marketing and customer insights, has some insight into the situation. As her title in a UK-based mobile systems company indicates, she is well positioned to gather the response of mobile payment users first hand. ‘Surprisingly, the element of ‘trust’ and ‘security’ was a priority for many of the millennials we spoke to, and as a result felt strongly that their bank was the preferred provider of payments technology,’ O’nion said in a statement. ‘However, it is clear they still want to see further innovation from all payment providers, to respond to their need for ubiquitous and reliable instant mobile payments.’

At this point, about 86 percent of millennials who have tried mobile payment have reported having issues when using contactless mobile payment methods. However, all is not lost. Out of 5000 people surveyed, 70 percent stated that they would try adapting to mobile payment if it was run by their bank, especially if the latter secured transactions by means of fingerprint authentication rather than through chip and pin.

The position of Millennials makes tech giants anxious

The reason why the hesitation of Millennials towards mobile payment is an issue is that they actually are the primary customers of most big tech providers. Born after 1980, they are supposed to be comfortable with technology and, for the most part, financially independent. In other words, they are in possession of the technology that powers mobile payment, they know how to use it, and they have the resources to potentially effectuate a significant amount of mobile powered transactions. At least, only in theory. In reality, they would only represent a market share of 52 percent, and that, when they are supposed to be a key demographic. Much is feared when it comes to the success of the project with other age groups. The capital and efforts invested in the endeavor have to be worth the end results.

The proponents of mobile payment will continue fighting reticence 

The world of mobile payments will continue to improve no matter what. A little earlier during the year, Google has announced that Android Pay would soon be available on “hundreds of thousands of new sites” where Visa Checkout and MasterPass are normally accepted. This will add on to Android pay’s wide array of facilities, some of which include the ability to add a card to one’s account by simply taking a picture of it, or the possibility to add more than one credit or debit card knowing that management will be made intuitive and seamless.

Apple, on its side, bets on security. One of its major features ensures an additional layer of safety by ensuring that customers’ bank account details are never revealed during a transaction. For instance, instead of using the Primary Account Number of a user, Apple Pay generates a Dynamic Security Code instead. That way, a new code is used for every new transaction, without ever disclosing the PAN.

Only time will be able to tell whether those improvements over traditional transactions will ever win over the fear of security that hampers progress. However, this won’t stop pioneers to push forward their technology to the best of their ability, as the field is indeed one that irradiates potential.

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Source : https://www.entrepreneur.com/article/284314

 

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