Mobile Payments: Connecting the Oldest Technology to the Future

Mobile Payments: Connecting the Oldest Technology to the Future

Bianca Lopes

Vice President, Strategic Marketing & Global Alliances at BioConnect

Views 667

Mobile Payments: Connecting the Oldest Technology to the Future

02.12.2016 09:15 am

The idea of merging or eliminating, one of the worlds oldest “technologies”, cash, to one of the worlds newest technologies, the smartphone, is super intriguing. But, beyond that, looking into the merging role of cash into any ubiquitous device is even more exhilarating.

Why?

Let’s look at facts when it comes to payments:

  • There are 1.3 billion active credit cards and debit cards accounts according to First Data research
  • Out of 7.3 billion active phones, around 2 billion phones are considered smartphones
  • The forecasts show that 50 billion connected devices will reach the market by 2020
  • And, 90% of cars are expected to be connected, too

And lets talk about including ourselves as “things” and what that will do to the market. Big enough to peak your interest? I certainly have my eyes all over it. 

What does this mean for payments? 

Clearly, the first market to see traction and have big input into what the future players will look like is clearly mobile payments on smartphones.

Brick-and-mortar stores are under threat from all angles. If I owned a retail store I would be stressing experience, because if there isn’t that, then what is there? From a payments perspective, the in-store checkout experience is increasingly incompatible to pretty much all aspects of the modern digital world we all live in. For example, 86 percent of consumers avoid stores with long queues, and frustration with waiting in line costs retailers billions in revenue each year. 

Through the immigration social "inclusion-ist "in me, I go and look at markets that have high rates of an unbanked population or people without access to conduct business due to the lack of physical infrastructure to do so. 

What is the advantage?

Well, as an example Sub-Saharan Africa has a 25% banking penetration but has seen 60% of mobile penetration into the market. What does this mean? It means they can conduct business, connect to outside merchants, use technology to become connected, and perform the fundamental value of cash: the ability to exchange something of value for something else.  

Here’s an example of one of the other countries I look to often. We are living in a digital era, yet half of the U.K. small businesses only accept cash, even though the U.K. has one of the most advanced contactless infrastructures in the world, over 50% of UK adults carry less than £5 in cash and 54 percent of Europeans paid using a mobile device in 2016. Seems strange? Inadequate and old school! 

Retailers are also leaving money on the table by not taking advantage of this connected world.

As a data geek, I always look at what the data opportunity is behind this.

Allowing things to be connected for payments, has also set unprecedented access to consumers and their data by the sheer fact that they are connected. The data created on patterns, times, geolocation and other factors if used through a mobile/online channel enables retailers, merchants and others to understand the consumer in a way that has never been done before. This allow for the ability to develop targeted and relevant content, and make the world of marketing a massive data source. 

And, yes, some perhaps most tech giants and retailers are currently taking advantage and using our data to sell to us. Do you see this as deceiving and unprecedented? I sure think so. 

I firmly believe and hope for a world that the opposite can occur. How can we use all this data ourselves as consumers? How can we now, because of mobile payments, enable easy frictionless experiences and better buying decision making? How can we instead of ending up with 6 new pairs of shoes a month, use this connected world to budget better and make real life decisions that connect the new payment methods to my existing financing world, and say, “Hey Bianca, want the apartment or this shoe? Because if you keep going, the shoe closet might end up homeless.” 

So, what about the 54% of those who want to adopted mobile payments?

Despite the fact that consumers use their mobile devices more than their PCs, desktops account for 85% of online spending. In addition, 23% of users abandon mobile applications after only one use, and a staggering 86% have abandoned a mobile basket due to the frustration of a lengthy checkout experience. Even more concerning is that only 4% of small retailers even offer a mobile application that accepts payments.

What is the solution to this friction?

Mobile payments bring up a huge security concern. As mentioned in one of my previous articles,many retailers and merchants are taking action to distinguish between mobile and desktop spending, sometimes even creating separate fraud prevention practices, as 7 out of 10 merchants believe it’s necessary.

I see a path where persistent verification of identity can become a threat or impediment for mobile payments to be processed. Checkouts have become so annoying to ensure that you are who you say you are. There needs to be a balance between security and convenience for identity verification and consumer ability.

What gives me hope?

Well. the fact that organizations like EMVCo say that we will enable consumers to safely and conveniently use on-device authenticators, such as a fingerprint or other biometrics to securely verify their presence when making an in-app payment. With the infrastructure in place, this could be the solution for ubiquitous devices to actually just be a larger growing trend to pay attention to.

This article published on blog.bioconnect.com

Latest blogs

Jonas Andersson Fingerprints

In Consumer Biometrics We Trust: Authentication For the Data Privacy Age

Data privacy is high on the global agenda. In the wake of data protection policies such as Europe’s GDPR, ensuring the integrity of personal data is an increasingly pertinent subject. This is a governmental and corporate policy reflection of the Read more »

John Burgos Mindgate Solutions

Overcoming anxiety around mobile payments & digital payments - In the South Asia Pacific

Innovation and technology usually go hand in hand.  Therefore, for innovation to be fully realized, the technology that enables the innovation must be adopted as well.  During the last 5 years, we have had innovations from Google, Apple, Read more »

Stuart Robertson iDelta

Finance Sector PLCs Hold the Key to Economic Recovery

We have started to see the devastating impact the Coronavirus will have on our economy.  The travel, leisure and hospitality industry redundancies are rapidly mounting up with restaurant and bar owners facing no option but to shut up Read more »

Hirander Misra GMEX Group

Are UK Banks profiting from the current coronavirus crisis and failing SMEs?

A UK business could be eligible for a Coronavirus Business Interruption Loan Scheme (CBILS), as set out by the UK Government. However, it appears that despite the Government’s best intentions, this scheme is not working in practice and some urgent Read more »

Otabek Nuritdinov Safenetpay

A strong fintech needs more than just access to funding

  Investors, both private and institutional, are excited about investing in fintechs that are in the payments services business. What are the issues that really should matter to you, as a client? In 2019, institutional investors Read more »

Related Blogs

Andre Stoorvogel Rambus

Money20/20 Trends: AI, ‘Everyday Commerce’ and Security

The bright lights of Las Vegas have gone out on Money20/20 for another year. As always, the event brought together the biggest names in payments and provided unprecedented insight into the future of financial services. So, after four days of Read more »

Christian von Hammel-Bonten PPRO Group

Cashless Payments: King in the Digital Age

Peer-to-peer mobile payments are nothing new with the likes of Paym, Google Wallet and most major UK bank offering this feature, but the announcement of WhatsApp offering P2P payments could accelerate the adoption of this payment method. With P2P Read more »

Andy Ramsden Trustonic

TEE + HCE – The Ideal Solution for Mobile Payments?

The world of mobile payments is not unlike the political systems we see in many countries around the world.  Three or more groups arguing; sometimes working together and at other times pulling in totally different directions. Multiple players, Read more »

Ralf Ohlhausen PPRO Group

Mobile-payments Are Taking Off — and It’s a Lesson for Us All

Mobile payment methods continue to soar in popularity in the UK following the introduction of new players such as Apple Pay, Android Pay and Barclay’s Pingit. Together, with the anticipated launch of Samsung Pay coming soon to the UK, this is Read more »

Tim Spenny GfK

Can Mobile Payments Leap Over the Innovation Chasm?

Apple Pay, Android Pay and Samsung Pay have certainly increased awareness of mobile payments in the US – but the number of connected consumers actually paying this way is small indeed. As we have seen with numerous other technologies, the consumer Read more »

Magazine
ALL
Free Newsletter Sign-up
+44 (0) 208 819 32 53 +44 (0) 173 261 71 47
Download Our Mobile App
Financial It Youtube channel