Digital wallets are quickly becoming the preferred payment method for consumers both in and out of stores. According to industry reports, nearly two-thirds of smartphone users in the United States will be using mobile wallet apps to conduct monthly transactions from half of 2021 to 2024.
The future of mobile payments will also intersect with the rapid growth of blockchain technology and cryptocurrencies. Integrating these technologies into mobile payment systems can revolutionize cross-border transactions, reduce transaction fees, and increase transparency.
Mobile payment options have emerged as a pivotal innovation, especially for e-commerce. They offer convenience, security, and versatility and have transformed the way businesses do business.
However, this process only continues to work if customers have an easy and secure way to complete their transactions. Unless banks and vendors agree on a universal payment solution, the momentum for mobile electronic payments could disappear.
The key to the sustainability of mobile payments lies in both shopper acceptance and merchant support for the platform. If merchants resist or feel uncomfortable with the systems they have to put in place, transaction efficiency and completion rates can decrease, even if shoppers approve.
Another influencing factor is the growing popularity of mobile shopping apps, which offer a superior user experience compared to mobile websites and progressive web apps (PWAs), allowing retailers to deepen their relationships with customers and You'll be able to strengthen brand loyalty and drive transformative return on investment. said Lawrence Snapp, CEO of Bryj, an AI-powered app development company.
“Consumer mindsets regarding the use of mobile payments are rapidly changing. Consumers are increasingly adopting and using mobile pay, whether for in-store or in-app purchases,” he said. told E-Commerce Times.
Driving the mobile payment trend
There are two reasons why consumers started adopting mobile payments. One is that physical shopping is not possible due to the pandemic. The second was probably an aversion to having to carry cash all the time. Mobile payments have solved that problem for many shoppers.
To adapt to changing consumer demands, some brick-and-mortar retailers are getting ahead of the potential new curve by installing physical terminals that give customers more flexibility in how they pay for their purchases. I set out to do that.
For example, one property had a capture camera pointed at the counter to quickly capture the barcode of a digital wallet. However, this strategy turns out to be less useful for all brick-and-mortar vendors.
Other hurdles required more complex solutions, such as absorbing the cost of upgrading to a new mobile payment platform. An even bigger challenge was ensuring that all systems employed by the vendor complied with Payment Card Industry (PCI) requirements.
A big driver for the move to mobile payment schemes was the “buy now, pay later” or BNPL opportunity that emerged during Covid-19.
“This growing demand for mobile payments is a result of the continued growth of mobile e-commerce. According to Statista, mobile e-commerce sales will reach $2.2 trillion in 2023, accounting for the largest share of global e-commerce sales. 60% of the high,” Snapp said.
Better identity security already exists
As the world becomes more digital, banking, shopping, and other forms of purchasing access are all integrated into mobile devices. Money Watcher predicts that within five years, digital IDs will account for the majority of forms of identification presented.
Retailers are in for a period of significant change over the next 24 months as both business and consumer preferences shift towards mobile ID authentication, said Andrei Stanovnov, co-founder and CTO of IDScan. It is necessary to prepare.
E-commerce brands are expected to explore effective ways to verify mobile identities. This initiative aims to reduce the risks associated with selling age-restricted products and strengthen overall fraud prevention measures.
IDScan's platform to combat digital fraud is one way retailers can secure new mobile payment methods using security protocols that standardize mobile IDs to enable contactless data transfer.
“While each jurisdiction structures credentials in its own way, all adhere to the same overall security features and no customer data is ever compromised during the acceptance or verification process. No,” said Stanovnov.
Today's e-commerce workflows verify the consumer's identity at some point in the purchase process. Retailers use her API to query the digital wallet where the ID is held and verify identity.
“Ideally, this process would be quick with one click for the end user, allowing the transaction to proceed with minimal disruption, improving the user experience and impacting checkout rates,” he said. explained.
More POS On-the-Spot coming to stores
Over the past 12 months, improved banking support has improved point-of-sale (POS) rendering for in-store payment convenience that mimics e-commerce trends. Customers also quickly adapted to tap-to-pay with credit cards and mobile wallets.
Fintech watchers report that at the end of last year's shopping season, half of shoppers relied on contactless payment methods. Industry experts suggest that BNPL companies will introduce new options to attract new users. This trend could force the Consumer Financial Protection Bureau to more effectively regulate these services.
Mobile point of sale (mPOS) is a new option that consumers can expect to see introduced this year. These additions should receive a positive response from both retailers and consumers in terms of improving the customer experience.
Convenient for both buyers and sellers, mPOS consists of software and portable hardware that processes vendor transactions, targeting retailers rather than customers. This setup provides convenience, reliability, and quick exit for both parties.
mPOS systems calculate sales totals, process payments, track inventory, and collect business data, similar to traditional cash registers and some existing payment platforms. The customer should be able to use a tablet, smartphone, or dedicated wireless device as his point of checkout.
A big benefit for store owners is that this process makes electronic payments portable and wireless. Accepts digital wallet payments and Click to Pay via Near Field Communication (NFC).
New scan-free transactions may appear
Scan-less checkout was a well-publicized innovation, but it wasn't. Replacing checkout registers in brick-and-mortar stores with no scanning required was a potentially good idea. However, consumer backlash and increasing revenue losses for vendors due to scanning errors and shopper deception necessitated a rapid rethinking of the process.
Both retailers and shoppers are at odds over the logistics of self-checking, missed product scans, and a growing distrust and desire to avoid such honor-system transactions.
We don't want to go back to a human-operated checkout scanline. The goal of eliminating that process is underway at some big box stores.
The new solution is an RFID-based automated scan that leverages AI-powered sensors. His RFID sensors in the cart or above his head input the items the shopper places in the cart.
If implemented, shoppers present their membership or payment card when entering the store. Purchased items are automatically added to your shopper's account. When consumers are done shopping, they can simply walk out of the store without waiting in the checkout line.
More payment trends on the rise as shopper attitudes change
In the e-commerce space, well-known trends such as financing options, buy now, pay later, and buy online and pick up in store will continue to grow. But the key advance is the enhanced ability to remotely verify a customer's identity, Stanovnov said.
“This development will definitely accelerate these trends even more than they have in the past,” he said.
In recent years, shopper behavior has significantly shifted towards mobile-centric solutions. Stanovnov sees a significant acceleration in the adoption of mobile payments, mobile ID authentication, and mobile shopping.
“This trend is not just a phenomenon of tech-savvy young people. It extends to all age groups,” he said.
A clear example is Louisiana, the first state to implement mobile ID, where more than 70% of adults have a mobile ID app installed. Stanovnov explained that this statistic reflects consumers' strong preference for digital integration and highlights the widespread and increasing comfort of mobile technology in everyday transactions.
“The future of retail is mobile. From mobile checkout to virtual fitting rooms powered by AI and augmented reality, retailers are finding new ways to blend physical and digital experiences to meet customers' evolving demands. ,” said Bryj’s Snapp.
