Clearly, mobile payment is the next big thing for mobile app development for smartphones. As per Forrester Research predictions, mobile payments in the US will grow from $12.8 billion in 2012 to $90 billion in 2017 – an annual growth of approximately 50% over five years. The launch of several NFC enabled phones over the past year, and the move by large players to grab a share of the mobile payments market, shows that more and more customers are moving towards using their smart phones as mobile wallets.
With mobile payments, customers get several benefits such as not having to stand in queues, splitting the cost of bills with friends at restaurants and saving time and fees spent at ATMs. While earlier security concerns prevented widespread adoption of mobile payments, with the safety of cloud storage for credentials and apps with PIN/password locks, mobile payments are being viewed as a safe and convenient alternative to credit cards and wallets. Most of the mobile payment networks are used for micro payments.
Mobile app development will have a key role to play in faster adoption of mobile payments. Here are the five trends that in our opinion will result in mobile payments replacing other modes of payments in the near future.
5 Mobile Payment Trends for 2013
1. NFC (Near Field Communication)
NFC has been around for a while, and it will have a major role to play in the rapid adoption of mobile payments. The latest Windows phones and the top-selling android phones are NFC enabled. The new BlackBerry 10 will soon support it, and rumor has it that the next model of the iPhone will have it too. The store-end integration, which was earlier an issue, is slowly gaining pace as more and more retailers are adopting payments systems such as Square and PayPal.
2. Contactless Payments
Mobile payments that remove barriers and queues will be the order of the day. Consumers got a taste of the efficiency of contactless payments at the London Olympics 2012, where Visa Paywave systems helped in beating queues by offering seamless conversions that allowed customers to pay for their food and drinks by waving NFC enabled smart phones at special terminals at retail outlets.
3. Better Security
A lot of initial customer concerns about mobile payments today are focused on security issues. Since financial information such as credit card and bank account details are stored on smart phones, there is an increasing risk of misuse in case of loss or theft of such phones. However, with cloud storage, there is a move from the mobile wallet to a digital wallet, which stores all sensitive information in the cloud, from where it can be accessed through either an NFC enabled device or a card by using a PIN. This largely reduces the risk of financial information being compromised.
4. Integration of Coupon and Rewards
For a while, coupons have been used for enticing customers to enter retail outlets. With mobile payments gaining popularity, businesses can now integrate them with loyalty programs and rewards. Starbucks rewards customers with a star every time they make a payment using the mobile payment app or the Starbucks card. Customers can collect stars and redeem them for bigger benefits. It’s only a matter of time before more brands follow suit.
5. Consolidation of payment standards
Currently, there are several methods available for mobile payments – from card readers to mobile payment apps on NFC enabled phones. In the end, it’s all about the customer, and the players who offer customers a consolidated system that works even at outlets that don’t support NFC, will benefit from mass adoption.
According to Jitin Narang, COO at TechAhead Software, “Mobile payments are the key to future of cashless payments. As the number of PC users are decreasing and mobile users increasing, the same trends will follow with mobile payments.”
Developing countries have used mobile payment as a means to reach those who are still far away from banking services, these numbers according to Financial Access’ 2009 Report “Half the World is Unbanked” are estimated to be 50% of world’s adult population.
What is your experience with mobile payments, and how do you see it panning out in the future? We’d love to hear your views.