10 May 2016
Pingit, Paym it! Why mobile payments are on the up
Some 20 million adults will use their mobiles to pay for goods and services by the end of the decade, according to the Centre for Economic and Business Research.
It expects the global value of mobile purchases to triple to £14.2 billion in 2018.
Here in the UK, there are lots of payments apps to choose from and take up is rising fast. Barclays’ mobile payments app Pingit hit its millionth business transaction in January, up from just 100,000 a year before. But what is driving the growth in mobile payments? And can yet more people benefit?
Why we love mobile payments
Just 20 years ago, few people had mobiles. Now, most of us could not imagine life without our smartphones. They have all but replaced cameras, calculators and pagers. And they look set to replace our wallets too. Here are just a few of the reasons people love making mobile payments…
They happen NOW!
In an age where instant gratification is king, people want to pay who they want, when they want.
Research from VocaLink shows that more than half of people would prefer to transfer money to friends or family via Immediate Payments, while four in 10 would like to pay urgent bills this way too. Kris Kubiena, director of consulting services at VocaLink, said: “In today’s world, both consumers and small businesses need to be able to move money instantly.”
They help us stay safe
Knowing you have received immediate payment is a boon for business and consumers alike. Take my recent experience of selling a second-hand car. In the past, it would have been a risky business: the cheque might have bounced, or the notes forged...Now, though, the buyer was able to make an immediate payment using his mobile.
Better still, I was able to check the money was in my account before he drove off.
They are simple
First generation mobile payment services generally relied on users setting up connections to send money to people. But that was then. Now, retailers can receive a mobile payment directly from a bank app. With contactless technology, meanwhile, small purchases can be made with just a flick of the wrist.
Whether you need to buy a kitchen or a sandwich, real time mobile payments are as simple as 1,2,3.
What we DON’T love about mobile payments
Security! It’s the bugbear of the digital payments industry. And despite the success of mobile payments, lots of people still harbour concerns about whether they are totally safe. Here are a couple of reasons we don’t love mobile payments – and an insight into how the industry is responding to these concerns.
They require too much data
Many people have reservations about disclosing personal financial information such as bank details to get access to mobile payments. Others worry about where such information is stored – especially with stories about data being stolen from popular apps such as Snapchat. There is no need for sensitive data to be stored in mobile payments apps, though. Paym’s proxy platform, for example, identifies users via their mobile numbers, keeping data away from the application – and away from prying eyes.
They increase the risk of fraud
If your mobile phone becomes your wallet too, it follows that it will become even more of a target for thieves. Or does it? Authentication processes have become increasingly robust over recent years. Apple Pay users can now authorise transactions using their thumbprints.
If we can show people that their data and their money are safe – we are well on the way to mobilising the payments world once and for all!