The way we pay for everyday goods and services is always changing. Early on, the world mostly relied on the barter system, until currency was introduced. Then, most people stopped carrying cash regularly, in favor of the credit or debit card. Sure, we still use cards and cash frequently, but there’s a new way many people are paying in person and online: mobile devices. We use our phones for just about everything in our lives, and this new mode of payment is just the next step in integrating mobile devices into every facet of our lives. Let’s take a look at the present and future of mobile payments in how we pay and interact.
The Major Players
So which companies are pioneering this new era of transactions? Unsurprisingly, Apple is one of the big players in mobile payments, but they’re not alone. Here are the main providers of mobile payment processing:
Apple Pay/Android Pay/Samsung Pay
Mobile wallet applications, like Apple Pay and Android Pay, are some of the most popular mobile payment options available. Seventy-eight percent of Americans are aware of the mobile wallet option, and 32% are already using them for everyday transactions. These wallet features are becoming a standard option on new smartphones, and many people find them very convenient.
A mobile payment platform designed for friends, Venmo is intended to make splitting the bill easier. Friends can send or request money for everything from cab fare to rent. The service has grown quickly by removing the hassle of owing your friend—now you can change that in an instant.
The trailblazer in online and mobile payments, Paypal is one of the most popular payment platforms for online sales, payment for services and more. Paypal also offers cards and business accounts, to cater to different customer needs.
Facebook and a few other messaging apps are starting to implement payment features, though this type of mobile payment is gaining momentum more slowly than other platforms.
Why are They Popular?
Mobile payments are gaining traction every year. 178 million Americans own at least one mobile device, and $214 billion was spent in mobile transactions worldwide in 2015 alone. By the end of 2016, the number of people using mobile payments in the U.S. is expected to rise from 23.2 million to 37.5 million. Here are some reasons why:
There are many patented biometrics systems that can make mobile payments even more secure than credit card transactions. Encryption, remote shut-down for stolen devices and two-factor authentication are making the technology even more secure.
One of the biggest perks of using mobile payments is convenience. Bringing one tool (a smartphone) out for payments, navigation, internet access, texting, and more is much easier than hauling around a wallet full of cards. Mobile payment is also a must for many people who hire remote workers as freelancers—it’s more convenient for everyone involved.
How Will Mobile Payments Impact Our Lives?
Merchants are obviously going to feel the effects of mobile payments more than anyone else as they get more popular. Businesses’ equipment needs, processing fees, and liability obligations will all shift. Many companies will need to invest in new equipment over time in order to retain customers who start exclusively using mobile payments. Benefits to merchants will include improved ability to cater to their customer’s individual preferences by using data collected via mobile payment. Location services can also allow businesses to offer coupons and expedited ordering—thus the rise of services like GrubHub and Foodler, which streamline and expedite food ordering. Mobile payments also make it easier for retailers to offer loyalty programs.
Aside from the changes merchants notice, there are other changes that individuals and industries will begin to notice as time goes on. For example, people often use mobile payments during transactions with friends and family—if you need to pay someone back, it’s much easier to send them a payment via Venmo instantly than it is to head to an ATM at some point and hand them cash. The banking industry will also be disrupted by more mobile payments, but the main changes may just involve fewer physical branches as most banking transactions shift online. Mobile payment takeover is clearly coming—it’s just a question of when.
We hope you found the above promoted content as entertaining and helpful as we did!