As a society we are continuing to transition from physical cash to various digital payment methods. As this develops many new trends will appear and disappear. From a business perspective it is highly convenient to collect payments via digital or mobile technology instantly when a product or service is sold. It provides a fast, secure, encrypted and is very convenient for the customer.
Security in the area of digital and mobile payments is a key priority for all parties. Consumer and business convenience must go hand in hand with creating secured authentication of payments. The presences of machine learning is helping to detect possible threats as millions of payments are processed every day.
Let’s take a look at some of the 2020 trends in this area.
Gen Z -The tech savvy generation
Gen Z is about to surpass the total population of millennials and this shift in population will have a huge significance in the payments area. Gen Z are currently aged 7 to 20 years and are the most tech savvy or tech exposed generation of the all. As a result, they have a higher dependency on digital and mobile technologies. This is expected to include demand for innovative digital and mobile payment methods in coming years.
Dominance of mobile wallets
All the big companies like Google, Apple and Samsung have a version of a mobile wallet. According to a report by RetailDive, around 2.1 billion customers were using mobile wallets in 2019. This number is expected to continuously grow. Mobile wallets allow consumers to operate a mobile application that mimic a physical wallet. Funds can be transferred and received, purchases can be paid for and loyalty cards can be incorporated into the process. Various components of the mobile wallet can lead to a quick and cashless payment system that is becoming increasingly popular in all corners of the world.
Customers will increasingly wave or tap their phones to do instant payments using NFC (Near Field Communication) technology. This technology is being used effectively in public transport systems such as on trains and buses whereby transit cards are accepted more instead of cash. The other area of contactless payments is developing with the integration of payment technology with the Internet of Things (IoT), making wearables, cars, appliances and many other connected devices potential points of sale items. A connected car for example could automatically pay tolls as it passes a scanner on the freeway or pay for a spot in a carpark.
Demand for mobile point of sale
Mobile point of sale (mPOS) technology allows businesses to collect payments anywhere either within their stores or off site at markets and festivals. Central checkouts are no longer required when sales staff are equipped with mPOS devices. According to Business Insider, there will be around 27.7 million mPOS devices operational by the year 2021 all providing a seamless and efficient way for customers to make payments.
Authenticating payments via fingerprints, eye scans or voice recognition are emerging as a digital payment trend with massive potential. With the increase in problems such as identity theft and fraud, biometric authentication can become a reliable and secure option for digital payments as it utilises an individual’s unique characteristics. According to Digipay.guru, a provider of digital payment solutions, there will be more than 18 billion biometric transactions taking place every year by 2021.
Smart speaker payments
Many of the big tech companies like Amazon, Google and Apple offer home assistants or smart speakers and they are starting to be seen as mainstream in many homes. Users can give voice commands to the speaker and receive a voice response in return. These speakers are increasing being used to order goods and service and make payment online. According to Statista, 35% of users use smart speakers for buying products like home care, groceries and clothing.
As the digital and mobile payments technology evolves there will be a continued offering of more convenience, more security and more connectedness between consumers and suppliers. There will be a brisk feeling of change as new technologies are introduced to the market place and we see the continued growth in this area well into the future.