The development and usage of smartphones has replaced quite a number of things including the tape recorder, alarm clock, music players, and the watch and now even cash and wallets. By the year 2020, mobile app payment processing will become a favored method of digital and in-store payments. Apart from simplifying transactions and offering programs, these methods of payments also provide incentives for retailers, consumers and financial institutions. With the advent of mobile app payments, more and more consumers are going cashless. A range of mobile payment apps like Google Wallet, PayPal, Apple’s Passbook, PayTm, Square Wallet, etc. have further made the process of paying through mobiles a simpler one. The recent move of demonetization in India has taken the masses by storm and everyone is struggling to exchange their new notes with the new ones. This is where these mobile payment apps will prove to be of great help.
In case your digital wallet is an NFC enabled Android phone, you can simply tap your smartphone at the card terminal at the checkout counter. In case your phone is not equipped with an NFC technology, you can consider e-wallets like Square Wallet. Systems like ERPLY allow you to check in at a store and let the cashier recognize you by facial recognition. Your purchases then get auto-deducted from your PayPal account. Pubs and restaurants prefer platforms like Tabbedout which allows the diners check in when they arrive and make payment for their meal anytime without having to wait for the bill. All this has become possible because of smartphones and their payment apps. If you are not fond of using credit cards then you can go for apps like Dwolla and Venmo to transfer cash. Also, you can transfer out a smaller sum from your savings account into your Dwolla or Venmo account first and then utilize it to make small payments. It is this range of opportunities for payments via mobile that more and more users are making way for hassle free mobile payments.
Considering the right equipment and payment app, a smartphone is a lot lighter to carry and also a great alternative to carrying cash. Smartphones can also be used as card readers. All you need is a credit card reader device plugged into the phone and it will begin accepting credit card payments right away. Transaction authorization is done with the customer’s signature on the mobile screen and receipts are mailed for safekeeping purpose. One factor that comes into mind while making such payments is security. What will happen if in case you transfer all your card payment details into the smartphone and someone else gets hold of your stolen or lost smartphone? You do not have to worry here. Most of these accounts and also your smartphone can be remotely wiped out or deactivated. To offer your phone an added layer of protection, you can have a passcode lock. Also, prior to begin linking your sensitive data to any platform for mobile payment, consider the customer reviews or the platform coverage from reliable sources.
Consumers are paying their purchases in stores and online and utility bills via mobile payment services. Here’s a look at the key data highlights of the US consumers using mobile as their method of payment:
More than half of the US mobile payments users pay for online purchase using their smartphones while just 2 in 5 pay for an offline purchase made at a physical retail store.
Online purchases that are made via mobile contribute majorly to e-commerce transaction in the luxury and fashion category (33%) followed by travel (27%) and sporting goods (26%).
Around 7 in 10 of the US mobile payments users utilize the service to pay their utility bills like television, electricity, etc.
Consumers prefer linking their mobile payment services with credit cards (51%), debit card (55%), bank accounts (41%) and PayPal (15%).
Mobile payments are used by consumers for a range of purposes that include making online purchases, paying bills, paying for products at a store and sending or receiving money between two parties. A common scenario in which mobile payment is used is paying regular utility bills. Bill payment via mobile has become a lot easier because of apps from banks that permit customers to link their utility bills with their bank accounts or credit/debit cards. Mobile app marketing has further led to the rise of these apps. Another scenario where customers utilize mobile payment is shopping. Around 54% of all the mobile payment users of the U.S. have paid for an in-app or online purchase utilizing their mobile devices. Since consumers are already familiar with online shopping on their desktop, it is more likely for them to use their smartphones for a similar purpose.
When it comes to making payments at physical stores, consumers are equipped with options that are beyond mobile. Here mobile loses out to the convenience and familiarity provided by card and cash. A confusing array of options can be considered as one reason behind a slow uptake of payments via mobile. Nevertheless, an augmenting number of price based promotions and marketing campaigns have influenced some to try out mobile payment options. The 3 common ways in which consumers prefer payment via mobile at a retail POS are tapping or waving with the smartphone, scanning a QR code and utilizing an app that does not need tapping or waving. It is more likely for consumers to use payment ways that do not require upgrading their devices. Using an app or scanning a QR code are methods of payment that work across devices as compared to tapping or waving which requires a smartphone equipped with the methodology of Near Field Communication (NFC).
In order to make the process of payment simpler for consumers, mobile payment apps are accelerating at a rapid speed which in turn is making the consumer go cashless. The less information the consumer has to enter, the better will be the adoption rate of mobile apps. The ease of use coupled with the evolution of smartphone users has led to the humongous growth in the fame of these apps over a short span of time!