There are many options for making mobile payments today. Most of them have become customer-oriented in order to grab that underserved segment of the market that is willing to be allured by genuine offerings.
The digital payment world has evolved way beyond imagination in the last decade. Research about the technologies in-use has been going on for many years, even before the 2000s. However, many of the payment solutions available in the market have only lately attained economies of scale. Many more ingenious modes of payment are still under development as society progresses to a completely digital ecosystem.
The predictions for the future of mobile payments are loud and clear about the transition to the cashless economy. But there have been concerns about the declining y-o-y growth in the mobile payment trends despite the pandemic push. As the adoption rate of mobile payments poses a concern, the answer lies in addressing the resistance from certain groups by solving the inherent problems in the system.
Types Of Mobile Payments
Mobile is a truly personal device that is handy and offers no barrier to access. The way technologies are being built and leveraged to distribute services has exponentially increased the possibilities of interconnection networks. When it comes to mobile payments, there are four options to consider:
- Super Apps
Customers can get all their services in one spot, and payments are integrated within the app without having to reroute. But there is a lack of these in the US.
- Branded Proximity Payment
Supermarket brands within their premises use these through proximity technologies like QR (quick response) codes, Bluetooth tech, or NFC (near-field communication). There is an observable mobile wallet trend in the convenience stores category of the US, owing to the next normal.
- Proximity Payment
These are point-of-sale payment solutions provided by tech giants to retailers who do not have their own branded payments solution. The tokenization of payments through the Near-field Communication (NFC) and Magnetic Secure Transmission (MST) modes makes them highly secure.
- Peer-To-Peer (P2P)
This is the stepping stone to a decentralized economy that eliminates financial intermediaries. The payment occurs directly between the banks of the transacting parties through a distributed application architecture that allows multi-way communication between nodes on a network.
Scope Of Mobile Payments in the Us
The adoption rate in certain developing countries has been enormous for the need for a contactless payment option during the pandemic. The US has already been using digital payments, so the switch to mobile payments has not been intuitive enough compared to the presence of NFC technology in a physical card. The adoption of 5G will further boost the use of mobiles for lightning-fast payments.
There is a barrier to using mobile wallets due to the absence of standardization across the board. Mobile wallets are reportedly only accepted by 4 of the ten merchants who accept credit cards. But the user experience provided by these wallets is undoubtedly increasing demand and, thereby, adoption by the merchants. The resistance is meager due to the value proposition of zero commission and no additional hardware requirement.
The Rise of Mobile Payments
Mobile payments have become more customer-oriented to capture that underserved part of the market, ready to be swayed by genuine services. Credit cards have been dubbed as a tool of the elite, whereas digital wallets that offer BNPL (Buy Now, Pay Later) are the real solutions for cash users who have been on the brink of conversion.
Millennials are the largest part of the population using mobile payment apps, followed by Gen Z and Gen X. These groups of users understand the technology and are highly inclined towards autonomy. They are creating as well as supplying to the demand.