The Evolution of Mobile Payments: What’s Next?
European’s are embracing new ways to pay, according to Visa’s 2016 Digital Payments Study. Last year, mobile payments activity tripled, from 18% in 2015 to 54% in 2016.
In the UK, 74 percent of people ‘manage their money or make payments using a mobile device,’ making it the most mobile friendly country in Europe.
Mobile banking is popular in the UK, even compared to other European countries. However, mobile payments have already become more commonplace in Turkey (91%), Denmark (89%), Israel (87%) and other Nordic and Eastern European countries. Only Belgium and Ireland represented Western Europe in the top 10 lists of mobile payment users.
Accelerated Adoption Rates: Only the Beginning
We are witnessing an acceleration of mobile payments, mobile banking and eWallet adoption across the world. People no longer hesitate to make expensive or important purchases on a mobile device, either, with 43% of UK households happy to buy holiday’, electronics on smartphones, pay a household bill (42%), or buy a train or bus ticket (41%).
Some of the most popular mobile payment and eWallet platforms include Apple, Android and Samsung Pay. But around the world, there are others, including Walmart Pay and Alipay in China and South East Asia, with 520+ million users.
Banks and other large retailers will, without a doubt, capitalise on surging mobile adoption rates, either through partnerships, white label agreements, or creating new branded mobile payment solution. Innovative solutions also need eWallets that connects to other financial products, such as credit cards, savings accounts, insurance and others services, such as loyalty schemes.
What’s Next for Mobile Payments?
Adoption rates will continue to increase for several years, only flat lining when the market is saturated. At that point, we can expect to see some consolidation, through mergers, with latecomers and those with insufficient market share getting absorbed by the market leaders.
Contactless payments and higher transaction spending limits have paved the way for mobile payments, according to Kevin Jenkins, UK & Ireland Managing Director at Visa: “The uptake of contactless cards has made a significant impact on normalising digital payments in the minds of British consumers, regardless of age. The near-ubiquity of contactless card usage is gradually helping everyone engage with newer ways to pay, including mobile banking.”
Integration and Innovation. Now that consumers are getting used to using smartphones for banking and payments, we will start to see the shift towards mobile-centric financial services and products. That can only happen when payment providers and financial services companies integrate a wider range of products (e.g. insurance, savings, credit cards, peer-to-peer payments, etc.) and innovate around the specific needs of mobile payment customers.
Loyalty Schemes. Engagement rates for brands with loyalty schemes have always been a challenge. Especially when a scheme is card-based since people only have room for so many cards in a wallet or purse. When a scheme isn’t considered essential it’s often ignored and forgotten. No one will forget a scheme when they are connected directly to their payment method, making a mobile payment solution integration the ideal chance for loyalty schemes to get a much-needed boost.
Biometric Security. No one can afford to ignore the risk cyber criminals now pose to consumers and brands. Tokenisation, two step authentication, individual purchase authentication and biometric security – fingerprints and retina scans – are some of the most effective ways to take security to the next level and reduce the risk for mobile payment users and merchants.
It is an exciting time for mobile payment providers, banks and merchants, with new mobile-centric solutions increasing the opportunity for innovation and new services that benefit customers. If you would like to discuss how to optimise your payments processing for mobile consumers, speak to our team. Call +44(0)808 159 3453 or email [email protected]
For more on mobile payment processing, visit our mobile services page.