mobile payments

Are Mobile Payments Able to Form a Cashless World?

01 Sep 2015 - 5 min read

For the last couple of months, the Information technology market has been flooded with announcements about concepts, recently developed, soon-to-be-released and already-out-there products. Along with their launches comes the promise of new digital ecosystems that will offer better services as well as convenience and will bring forward bigger customer satisfaction. The interest in topics about the appearance of such ecosystems seems to be escalating. Especially when mobile payments are positioned at the heart of various discussions. Google, MasterCard and Apple already obtained digital wallets, while Starbucks debates integrating mobile payment strategies too and even Domino’s Pizza wants to acquire similar ones. And when such giants and other financial institutions, telecommunication companies and retailers pay attention to these mobile-focused dynamics, the significance of non-cash payments cannot be doubted.

Digitalization of the world has soaked in our everydayness. It gives unlimited venue to entrepreneurs and consumers. They are enabled to experiment with countless modern-day devices led by the idea of facilitating the consumeristic future as much as possible. And since a new era has emerged, that of smartphones and wearables, it turns into a rule for anyone to keep up with the unwritten demands of this tech-based present we all live in. Following numerous progressions, even the methods of making a payment are going through changes. With the rapid development of more and more innovative technologies, using cash to pay for services or goods slowly but surely will become a thing of the past. Because people value speed, time-efficacy and immediacy, mobile payments (or m-payments) are envisioned to replace the usual time-consuming ways of purchasing. Thus, since mobiles are indeed the future of e-commerce, is it possible for m-payments to really unfold into a norm?

Insidepost ATM NFC Mobile Payments

According to MEF’s Global Mobile Money report shared in June 2015, mobile commerce keeps expanding. The statistics indicated that back in 2014, 66% of mobile media users around the world conducted a mobile transaction, while 69% took advantage of mobile banking. Other figures pointed out that 14% out of 15, 000 mobile users from 15 countries used their cell phones for shopping and scarce 8% of them used mobile wallets. What is the overall result of the survey? On the whole, despite the fact that not everyone is ready to replace the traditional cash-based payment method with a mobile-oriented version of it, m-payments are said to set new trends. With Near Field Communication (NFC) contactless options, the digital revolution in mobile-first markets across different sites of the globe will be accelerated and mobile payments will take off everywhere. The growth of m-payments is also influenced by telecommunication, mobile and other corporate titans. Apple’s discussions, for example, about implementing mobile payments have been indicated to be on the top of the influence-scale. This scale in particular demonstrates to what extent a customer’s perception about m-payments is affected by the decisions of authoritative and leading companies.

Mobile Payment Usage IN The US

(Photo credit: Thrive Analytics)

This redirection towards more digital-centered services is even penetrating countries like Kenya where 93% of the population uses mobile banking and Nigeria with 85% of people doing the same. Such findings are major. They can influence the thinking of customers in more developed parts of the continents. Consequently, all of this will help them overcome barriers which prevent them from completely embracing the opportunities provided by m-payments. In this regard, even though many benefits have been emphasized on, a significant number of consumers feel more secure and comfortable with making usual payments – by using cash. So what exactly stops one person from choosing to use his or her phone when paying for something?

First and foremost, it becomes apparent that there is a public confusion regarding the usefulness of the m-payment. 18% of people lack awareness and guiding information about it. They do not have the basic concepts and cannot further see the point in it. Secondly, there come the security concerns. Fearing that this type of mobile services and systems will make them more vulnerable to frauds and cyber-abuses, consumers show unwillingness to use private and credit cards’ information for mobile-based payments. In order to tackle such and similar issues, companies, organization, websites and online shops are coming up with authentication solutions that are capable of guaranteeing robust security. These solutions revolve around options such as: asking the user for an eye scan, a fingerprint and even a heart rate sensor. However, the percentage of people that has incorporated m-payments into their private and business lives know about the variety of advantages that comes with it.

Man Paying With Mobile Phone

From a business perspective, mobile payment services promise to enhance sales and boost the levels of customer loyalty. Small and big businesses can incorporate diverse applications and programs which will allow them to monitor and track the purchase-history of their customers, trends, preferences and so on. In relation to this, Gene Signorini, the vice president at Mobiquity, states that; “If businesses use technology to link a payment to their points or other loyalty programs then it adds value to the customer. This makes the customer want to return, which then increases revenue.” Moreover, m-payments will result in cheaper credit card fees, which is really cost-effective for one business or another.

The biggest advantage for customers, on the other hand, is the ease-of-use. They can buy and pay for goods whenever they want and wherever they are. Furthermore, by having their data saved on the m-payment app, clients will avoid the hustle of entering requested details over and over again. Most of all, they will no longer have to remember pin codes and to look for the proper credit card in their purses or wallets. Purchases will happen much faster and easier than ever before.

Mobile Payment Coffeeshop

In summary, the regular emergence of new technologies accelerate the shift from a cash to a cashless world. Small, medium and big-size businesses are looking for alternatives which will help them attract and preserve more clients. Consumers, on the other hand, demand services which will be more satisfying and will cost them less time and money. Dealing with payments on a regular basis, everyone seeks ultimate easiness and flawlessness. Mobile payments can offer this. They are not only metamorphosing into a habit but are slowly changing the current status of markets. This form of paying is becoming a natural extension of people’s routines even in some countries in South Africa. Because the population there did not have access to other cashless payment methods (credit cards or checks), m-payments were quickly approved, accepted and absorbed. Yet, since the competition in developed countries is towering more and more, the infiltration of m-payments might take a while. And still, with Apple, Samsung and other companies which are ready to start implementing them, such payments are expected to become a thing of the present.