Mobile Payments: Will They Dominate The Market?
December 27, 2023
Some time ago we were looking at the meta-verse as the (potentially) next big thing in technology, which then saw an increase in memes and not much else, and we turned our attention to Artificial Intelligence (AI). And while AI is still considered to be one of the big players in the future, we should all be expecting great things from a device we have had for years, yet we keep finding new uses for: our mobile phones.
As consumers spend more time on their phones, mobile payments are looking like they will be dominating the market, even against cards and cash. Mobile payments are projected to hit 10% of all spending by 2030.
The Mobile Payments Umbrella
The term ‘mobile payments’ is broad: it covers digital wallets, any telephone or e-commerce payment made in a mobile device, carrier billing and POS payments among others. And these possibilities are continuously expanding to the point that growth rates could surpass our expectations.
Faster growth would be quite a feat, considering that ECB data says mobile payments tripled between 2019 and 2022, moving from three percent of all payments to 10 percent by volume, and four percent to 11 percent by value.
In the UK, in the last three years, the use of mobile payments has gone up 75%. As of 2023, a third of all consumers make use of mobile payments. It is expected that by 2023, one in ten dollars spent globally will be via mobile device.
The reason for the popularity of mobile payments boil down to very simple reasons: the adoption of smartphones globally, as there’s more phones than adults, and in places such as Africa, there’s more smartphone devices than bank accounts. The rapid rate of mobile payments are also attributed to the pandemic and how consumers got used to shopping online, or using the contactless feature of mobile payments to avoid touching potentially contaminated surfaces.
Other reasons include the convenience of phone payments and the ability to do banking and payments on the same device. The key concept is the amazing user experience.
There are some setbacks to mobile payments, however, and the main one is security. Mobile devices and their apps are susceptible to hacking, and consumers don’t have the education to recognize phishing emails consistently, making it easy for scammers to simply steal passwords by pretending to be banks or other legitimate organizations. In fact, according to Developer portal build38.com, almost nine in in ten companies in the US expect data breaches and cyber attacks in 2024.
Research confirms that the amount of vulnerabilities, device exploits, mobile malware, and infected devices is growing at an alarming rate. To sustain the growth and adoption of mobile payments, efforts to secure these solutions will need to grow accordingly.
Payments Cards and Mobile has long argued that in order to protect legitimate customers from fraud, a form of multi-factor ID could be the only way to fix the issue, and according to Kaspersky, attacks in mobile devices saw a dip in numbers as app security improved, but there’s more to be done.
At present, mobile commerce is at risk of exposure to more criminals by the day, and that is a deterrent for new customers, as the more they perceive a risk in a technology, the more they will avoid it.
The idea of a comprehensive digital ID looks like the solution, but there’s much work to do in regards to implementing it. Such as which organization will have the responsibility of implementing such a thing, the extent to which consumers will feel comfortable using it, and the biggest one: are consumers ready to digitize their identity and put it on the internet.
All of these are possibilities and questions worth pondering, as technology advances, there are some compromises both organizations and consumers must make to keep new technologies from crashing and burning.
Want to learn more? Check out Payments Cards and Mobile’s full write-up here.
Share your thoughts on our LinkedIn page.
Data Reveals FinTechs Are Not Focusing Their Efforts in Attracting Gen Z Consumers
Adoption Of AI Tools Among Businesses Skyrockets
