Intrigued to know what the predicted growth of cashless payments entails? Businesses are finding innovative ways to retain their customers by offering secure and convenient payment options.
In this blog, we’ll explore:
- Mobile payments: future market insights.
- Latest trends in mobile payments.
- Overcoming potential challenges.
Mobile payments: future market insights.
The global market size of mobile payments is forecasted to reach $18.84 trillion in 2030, up from $2.98 trillion in 2023. Any guesses why that is? In short, it’s thanks to the increased penetration of smartphones and the popularity of e-commerce platforms.
Currently, PayPal, Alipay, Apple Pay, Google Pay, and Samsung Pay are market giants. But many other advanced options are popping in at a rapid pace.
These mobile payment solutions allow users to leverage top-notch features, such as Near-Field Communication (NFC), mobile wallets, QR codes, and many more. Such features add security, convenience, and speed to the users’ payment experience and imply a bright future for mobile payments.
Curious to know what happens in a mobile payment? Get an understanding of mobile point of sale, mobile commerce, and mobile banking with the help of our insightful blog. Read now.
Latest trends in mobile payments.
Mobile payments have seen tremendous growth in recent years, with consumers tending to use their smartphones for making purchases and managing their finances. Mobile-based payment systems are evolving at an extremely rapid pace, so it's difficult to stay up to date.
Let’s look at recent trends that have the power to shape the future of mobile payments.
1. Contactless transactions.
Finding a touch-free payment option was considered a blessing during the pandemic. But contactless has become a global norm.
Mobile payments have inevitably reduced the usage of physical payment cards in favour of mobile payments.But this doesn’t mean payment cards will disappear.
What we’re saying is that the need for actual, physical cards will decline due to mobile payment apps. The future of mobile payment processors will provide multiple payment options, such as digital wallets and traditional cards.
2. Expansion of digital wallets.
Mobile wallets are expected to be an indispensable part of the future of mobile payments. They’re convenient, robust, and secure making them a preferred choice for consumers. In 2022, mobile wallets accounted for nearly half of global e-commerce transactions.
As we know, convenience is king, so it’s only logical that these digital wallets will continue to develop and rise in the future. Future digital wallets may include loyalty programs, personalised offers, and the ability to store multiple payment methods from various providers.
3. Focus on biometric authentication.
Amidst the security concerns, biometric authentication is set to play a crucial role. Biometric authentication via fingerprints, iris scanning, or facial recognition is already becoming a part of mobile payments.
This is an ideal solution against theft and eliminates the need for PINs or passwords. Businesses continue to invest in protecting their valuable customer data and instil confidence in users. This security approach offers a seamless and secure payment experience.
4. Integration of the IoT.
The Internet of Things (IoT) is rapidly transforming our homes, workplaces, and cities. The integration of IoT with mobile payments will open up new possibilities for seamless and automated transactions.
From purchasing groceries to smart fridges, or even making transactions through wearables, there are many wonders to come. Imagine your fridge runs out of milk and automatically orders it from a preferred grocery store. These scenarios will become more commonplace, leading to enhanced convenience and efficiency.
5. Use of voice-activated payments.
Digital voice assistants not only simplify your household chores but can also make transactions. You can now simply ask Alexa or Siri to initiate a transaction for you.
These voice assistants can be integrated with your digital wallets by choosing your preferred payment method and linking it to your voice assistant accounts. You can even authorise voice-initiated transactions through a secure authentication process, like a PIN or biometric scan.
6. Emergence of AR payments.
Augmented Reality (AR) has entered the mainstream with astonishing technologies.
Augmented Reality platforms like Meta will boost mobile payments by offering immersive shopping experiences. You can now visualise products in your home and make purchases within an AR environment.
7. Proliferation of P2P payments.
The popularity of Peer to Peer (P2P) payments is expected to surge in mobile payments in 2024. You can easily split bills, pay friends, or transfer money to family members with just a few taps on a mobile device.
This trend is especially popular among younger generations who prefer hassle-free and real-time payment options. As mobile payment platforms continue to enhance their P2P functionalities and broaden their global reach, traditional cash exchanges and even some traditional banking services could face increasing competition.
8. Growth of mobile POS.
The rise of mobile point of sale (mPOS) has brought a significant shift to card payment processing. It has allowed businesses to embrace a wireless economy.
Dedicated wireless mPOS units replicate traditional cash registers and sale terminals. This provides you with an easy, space-saving, and wire-free solution for accepting payments.
You don’t need a centralised checkout location. The flexibility of mPOS enables you to make transactions wherever you are. For instance, Apple has successfully integrated mPOS into their operations, allowing customers to conveniently checkout without the need to visit a cashier.
The growth of mPOS is not merely a passing trend; it represents the future of mobile payments.
9. Integration with blockchain and cryptocurrencies.
Cryptocurrency and blockchain are likely to disrupt the traditional financial landscape by offering transparent and decentralised payment solutions. As digital currencies become more regulated and stable, they will likely emerge as viable payment methods for everyday transactions.
Mobile wallets will evolve to support cryptocurrencies, enabling users to pay, receive, and manage their digital assets securely.
10. Artificial intelligence and personalisation.
AI will play a key role in the growth of mobile payments by enabling personalised and context-aware experiences. AI algorithms can analyse user behaviour, preferences, and spending patterns to suggest targeted offers and rewards.
11. Evolution of “Buy Now, Pay Later”.
Mobile payment platforms will continue to integrate "Buy Now, Pay Later" options into their services. Customers will be able to make purchases using their mobile devices and choose deferred payment plans, allowing them to split the cost of their purchases over time.
This trend will attract a broader customer base, especially among millennials and Gen Z, who prefer flexible and interest-free payment options.
Overcoming potential challenges.
The smartphone market and its acceptance among the population is growing rapidly. But, it doesn’t come without its challenges. Here are the biggies to consider, as well as how you can overcome them…
- Privacy and security.What if my phone is stolen? Is there any kind of fraud prevention? Does the NFC chip send uncontrolled data? These are a few scary questions associated with mobile payments. But the new advancements, such as strong encryption, authentication, and tokenisation are overcoming these challenges and building trust among users.
- Compliance standards.Mobile payments are continuously evolving, but innovation must come with consumer protection. Government and regulatory frameworks should align with innovation to deter the harms of technology and foster positive consumer experiences.
- Standardisation and interoperability.It’s vital to overcome the fragmentation challenge in the mobile payment market. There’s a need for collaborative efforts from financial institutions, payment service providers, and technology companies to enable industry-wide standardisation.
Looking forward.
Mobile payments are not going anywhere. In fact, we’ll see many more innovative advancements and integrations with other technologies such as AI, IoT, and blockchain in mobile payments from 2024 and beyond.
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