Be ready to leave your wallet at home and use only your smartphones to perform all financial transactions. In the near future, we may no longer have to carry cash or cards in our pockets. The past few years have seen how mobile payments have grown from a niche service for tech-savvy consumers to mainstream use. Research predicts that mobile payments will end up replacing traditional cash and card payment in 2018. Below are 8 trends that prove mobile wallets will be the preferred mode of payment in 2018.
What are mobile payments?
Before discussing the future mobile payment trends, let us first define what a mobile payment is. Also known as a mobile wallet, a digital wallet or e-wallet, mobile payments are any transaction made, initiated or received with mobile devices in return for goods or services. With mobile devices becoming the most used shopping channel, mobile payments have emerged as an attractive solution for consumers’ convenience. Merchants and online sellers worldwide are being compelled to embrace the new form of payment in order to attract and maintain the maximum number of customers.
It is the era of mobile devices and smartphones
Smartphones have become an indispensable and nearly irreplaceable part of consumers’ lifestyles. The majority of us cannot imagine a life without our smartphones. Deloitte Global predicts that by the end of 2023, the adoption of smartphones among adults will surpass 90% and owners will interact with their phones on average 65 times per day. Just like smartphones offer them fast and easy communication, consumers want the same convenience when they shopping, either online or at a traditional brick-and-mortar location. They want a smooth shopping experience as well as be able to pay on the spot without any hassle.
There is widespread acceptance of mobile payment solutions
One of the major trends that prove mobile wallets are here to stay in 2018 is the widespread acceptance of this mode of payment among consumers. Studies reveal that there is a general consumer interest towards using mobile payment applications. The convenience and flexibility factors help increase the adoption rate of mobile wallets. Today, consumers do not have to enter sensitive information while paying.
Contactless payments terminals can be found almost anywhere
Studies indicate that contactless payment terminals have risen greatly over the past few years, and this is expected to continue. Contactless payments have been made possible thanks to Near Field Communication (NFC). NFC is defined as a method of wireless data transfer that detects and enables technology in close proximity to communicate. With smartphone payment applications such as Apple Pay, Android Pay or Samsung Pay, customers can make payments easily and quickly. Smartphones use a one-time code instead of the actual credit card number. Thus, it is more secure and convenient.
The Internet of Things is revolutionizing the payment industry
The Internet of Things (IoT) is changing the way businesses and consumers interact through connected devices. Mixing with contactless payments, IoT is growing to become more popular than ever. With IoT, all devices can be connected to the internet and the IBM/Visa announcement will enable payment transactions. Point of sale can be anywhere thanks to IoT, allowing greater flexibility and convenience. Researchers predict that IoT devices will ultimately eliminate any friction that exists during financial transactions. This is in fact the main goal of IoT contactless payments – to make payment processing faster and stress-free for both customers and retailers.
AI has made a significant impact on the payment industry
While mobile payments have been introduced to reduce transaction fees, increase convenience and enhance payment security, new payment systems are paving the way for added value and benefits in the retail industry. Artificial Intelligence (AI) is being used by the industry to identify customers, collect more information about consumers and enhance their shopping experience. According to research, AI has started to play a vital role in driving real value for firms in financial services. Thanks to AI, mobile payment platforms may rank among the top payment solutions for merchants and customers. This is not surprising as AI has helped major industry players eliminate barriers that slowed the growth of mobile payment platforms. As AI has the ability to process large amounts of data and give genuine feedback, AI-powered fraud detection systems helped the mobile payment industry mitigate potential fraud risks.
Mobile wallets are more secure than traditional payment methods
Mobile payments have proved to be more secure than the traditional forms of payment. Indeed, a mobile wallet contains extra layers of security that protect all electronic transactions. There is no need to carry cash or cards, thus making you less susceptible to credit card fraud. A chip embedded in a mobile device enables dynamic authentication in which unique data is used. Once again, new AI-embedded systems will allow new forms of authentication such as facial recognition. 94% of consumers in the United States believe that mobile wallets are safer, with 30% trusting banks to protect their information.
Consumers prefer easy bill payment options
Today, consumers are seeking fast and hassle-free means to complete their financial transactions. With mobile payment solutions, it has never been easier and more convenient to pay your bills. According to recent studies, the adoption of mobile bill payment has doubled over the past few years. The amount is expected to increase as more consumers are using their smartphones to view and pay their bills. This new mode of payment has become a must-have service to meet competition and demand. Retailers are advised to embrace mobile bill payment solutions if they want to maintain customers and enhance their service.
Mobile payments are the future
The pace with which mobile payments are gaining popularity can only mean one thing – they are here to stay in 2018 and the coming days. While cash and cards still dominate the payment landscape in certain places, there seems to be a wider acceptance of mobile payment options by younger demographic groups. Significant shifts in consumer behaviour and the emergence of new technologies can only result in an unprecedented transformation in the payment industry in 2018.
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