Mobile payments are rapidly becoming the next big thing. In 2015 users spent $376 annually using their mobile phone as a payment gateway and the number is expected to triple in 2016.
With consumers spending more time on their phones rather than desktop devices and businesses offering better mobile experiences, it comes as no surprise that the mobile payment industry is about to experience another growth leap this year.
Just like bank checks and solid cash has been replaced by credit cards, the latter are soon to be pushed over by eCash, digital and cryptocurrencies and multiple mobile payments options. The Fintech startup scene is buzzing, traditional financial institutions are slowly catching up an actively seeking investment opportunities.
Why is this happening and what changes should be expected in 2016? Read on to find out.
Mobile Payments Will Become Even More Secure
With the rise of all sorts of cybersecurity threats, customers are drifting towards a more secure solution when it comes to personal finances. The case is particularly true with millennial consumers, who prefer not to use credit cards for online purchases.
Different mobile payments providers are competing to provide higher security measures for their users. Both Apple Pay and Samsung Pay are using fingerprints to authorize a purchase, along with advanced tokenization and advanced NFC-based contactless pay terminals. Apart from Starbucks, Domino’s and Target, we are sure to spot more of those at large and small retailers nationwide this year.
Advanced biometric recognition processes such as voice recognition, pulse and keystroke detection and more are likely to get tested as a new way to increase security and keeping mobile payments fast and convenient.
More Mobile Payment Players Are About To Enter The Market
Walmart has announced Walmart Pay earlier this year, which should be launched nationwide by early 2017 and this giant is unlikely to stay the only one at the market for too long. Other tech companies apart from Apple Pay, Samsung Pay and Android Pay, are likely to enter the market as well.
Sure all of them have similar features, however they are not meant to be one-to-one copies of each other. In fact, different mobile payment platforms will be organically integrated within their respective companies and offer something unique to their users.
Big retailers or major tech companies will not become leaders in the payment industry, but we can expect them to support the growth of larger platforms and overall vision.
Lack of Consumer Trust May Slow Down The Niche
According a research conducted by ISACA in 2015, almost 47 percent of respondents stated that mobile payments are not secure and 30% doubted their security. Yet, at the same time 42 percent admitted to have used is this payment method at least once in 2015.
Among the top concerns were the following:
- 11 percent didn’t trust the overall security of a mobile payment
- 9 percent didn’t like giving away too much personal information
- 8 percent claimed the system is not secure
- 6 percent didn’t trust the merchant.
Mobile payment providers will need to invest heavily in educating the audience about the type of services they offer and pay special attention to highlighting the security side of the product, while actually working on bulletproof technologies for data protection.
Mobile Payments Will Shift Beyond Smartphones
Wearables are still trending and their popularity is expected to reach 81.7 million users by 2018. By 2019 approximately two in five Internet users will access the web via a wearable device. Considering that convenience and seamless authentications are the two main reasons why consumers opt for mobile payments, the providers will have to take another challenge and adapt their products for watches bracelets and other smart devices consumers will choose to use.