Posted by Bethany Frank on 10 Dec 2015
A number of the biggest names in technology are actively investing, building, and marketing mobile payment platforms. Apple, Google, Samsung, and even financial institutions like Chase are all vying to grab a portion of this fast-developing market. While mobile payment platforms have taken off in some countries around the world in recent years, consumers in the United States have been relatively slow to adopt. Beyond the challenges, however, mobile payment platforms offer a host of benefits.
Mobile technology is primarily consumer-focused, so it makes sense for technology companies that are interested in the mobile payments space to place heavy focus on delivering products that offer convenience for the consumer.
A mobile payment application helps consumers reduce clutter by allowing them to ditch cash, physical credit cards, and perhaps even paper receipts depending on the merchant. This convenience may especially appeal to frequent travelers, business consumers, commuters, and those who live a busy or active lifestyle. Because cash transactions are more difficult to track, mobile payments can even help some consumers organize budgets and keep better track of their spending.
A major talking point of mobile payment platforms is their heightened security, an obvious consumer benefit in an age when financial fraud and cybercrime run rampant. When a consumer pays with a traditional credit card swiped at a payment terminal, data such as his or her credit card number remains with the retailer. In contrast, mobile payments systems generate temporary “tokens” to complete transactions; these tokens never reveal the actual credit card number and do not contain sensitive information that the retailer can store, thereby protecting the consumer in the event of a security breach.
Mobile payment platforms also give consumers more peace of mind—unlike the case of a lost wallet, a consumer would not have to frantically cancel credit and debit cards if his or her phone is lost or stolen. Because mobile payment applications are PIN-protected (even fingerprint-protected in the case of Apple Pay), a third-party would not be able to penetrate the various security levels and make unauthorized purchases if the phone is lost or stolen.
A major roadblock for mobile payment platforms is the lack of merchant support, but retailers would actually benefit from driving customers to mobile payments. It could help businesses reduce costs by saving money on paper-based transactions. Less paper could also translate into less disorganization for the business.
Wider usage and acceptance of mobile payments can also aid retail and other businesses in the development of rewards programs to increase customer loyalty. Data from mobile payments can be used to identify the buying habits of particular consumers, which could then be used to design specific incentives to keep the consumers coming back for more of what they like. Businesses could offer customers discounts or free gifts for making payments via mobile in order to drive store traffic and increase sales. Mobile payments data can even help businesses identify sales trends and predict inventory needs.
There are plenty of benefits to widespread mobile payment adoption for both consumers and businesses. On the consumer side, mobile payment platforms offer both speed and simplicity. For businesses, mobile payments could be used to design individualized loyalty programs and even reduce costs and increase sales. Although growth has been slow in the United States and other markets, there is reason to believe all parties will warm up to the new technology to reap these potential perks in coming years.
02 Apr 2019 Blog Fintech Disruption: Creating Opportunities for Financial Institutions Fintech can help financial institutions deliver better customer experiences. This blog examines opportunities that fintech can help unlock in faster payments, conversational commerce, and data and analytics.
10 Dec 2018 Blog 3 Benefits of Pay by Text for Digital Bill Payments Businesses are always looking for new ways to streamline bill payments. Pay by Text can deliver a customer bill payment experience that’s quick, convenient, and highly personalized.