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The Mobile Payments Revolution Is Happening Today. Is Your Business Ready?

The Mobile Payments Revolution Is Happening Today. Is Your Business Ready?
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  • The Mobile Payments Revolution Is Happening Today. Is Your Business Ready?

The Future of Commerce is Mobile

Every day shoppers around the world are choosing to pay for their everyday items with the mobile devices in their hands in place of the cash and credit cards in their wallets. Thanks to improved technology, better connectivity and superior all-around convenience, local payments made via mobile devices are experiencing dramatic growth worldwide with no signs of slowing.

In fact, in the U.S. alone, it’s estimated that more than half of all ecommerce purchases will be made from a mobile device by 20211 and as of 2019, 67% of all global ecommerce transactions were made via a mobile device2.

Three Types of Mobile Payments Commonly Used by Shoppers Across the Globe

  1. Mobile point of sale: Growing in popularity around the world, mobile point of sale replaces a fixed POS terminal with a phone or tablet and uses special hardware to allow for payment via credit or debit card.
  2. Remote mobile payments: Whether it’s on an app like Amazon or a website like Nike.com, whenever you purchase something via your mobile device you are conducting a remote mobile payment.
  3. Mobile proximity payments: Similar to mobile point-of-sale, mobile proximity payments are any transactions that occur at a point of sale where shoppers use a mobile device to pay in place of credit cards or cash. These transactions are especially convenient for shoppers because they only require a simple wave, tap or scan of a QR code from a mobile device to complete a payment. GrabPay and AliPay are popular examples of digital wallets that enable mobile proximity payments.

Digital Wallets Are Replacing Traditional Ones

As more shoppers rely on their phones to make purchases, they are reaching into their wallets less often. With that trend comes the rise of digital wallets, a preferred local payment method for both remote mobile payments and mobile proximity payments.

Also known as ewallets, digital wallets securely store shoppers’ payment details like credit card or bank information from the convenience of their smartphone, some ewallets can also be topped up via cash deposits at retail locations and kiosks, eliminating the need for a bank or credit card altogether. This allows shoppers to easily make in-person cashless and cardless payments thanks to Near Field Communication technology (NFC) and Quick Response codes (QR codes).

  • NFC Mobile Payments: Available in most smartphones today, NFC mobile payments technology allows shoppers to simply scan, wave or tap their phone near the POS system in order to complete a payment. The transaction is fast, contactless and uses a shopper’s digital wallet instead of cash, credit card or check.
  • QR Codes: As an easily identifiable matrix barcode, QR codes allow shoppers to use their smartphone camera to quickly authenticate and authorize a payment from their digital wallet during a point of sale transaction. QR code usage is growing worldwide due to its low cost and widespread accessibility.

A man engaged in Mobile Digital Commerce

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The Types of Mobile Payment Apps Shoppers Are Carrying

Just like regular wallets, mobile wallets come in all shapes and sizes, each boasting various features and reasons to use it. Today, there are two types of digital wallets growing in popularity across the world: closed loop wallets and open loop wallets.

  • Closed loop wallets: Anyone who uses their Starbucks app to purchase their morning coffee is using a closed loop wallet. Offered by retailers to increase loyalty, offer discounts and learn more about their shoppers, closed loop wallets are a popular way to pay for items only at a particular store.
  • Open loop wallets: This type of digital wallet works more like a traditional wallet by storing bank and credit information and allowing shoppers to use it wherever it’s an accepted form of payment. GrabPay, Paytm and AliPay are all prevalent examples of digital wallet platforms.

Implementing Mobile Payment Solutions Increases Conversion Rates

Although mobile payments are the most common method for transactions around the world, research indicates that checkout abandonment rates are twice as likely to occur from a mobile shopper than a desktop shopper3.

By integrating with a mobile payment gateway that accepts payments like local digital wallets, you’re offering shoppers a fast, familiar and convenient method of payment they know and trust. Along with accepting other alternative payment methods, digital wallets help you reach more customers, establish more credibility and increase conversion rates during checkout.

Merchants Must Adopt Mobile Payments or Be Left Behind

While it is likely that cash will not disappear completely for 25 years or more, physical card payments are likely to lose significant ground to mobile and digital payments over the next 10 years4. That means mobile payment systems will only continue to rise in popularity and acceptance around the world. By offering mobile-friendly digital wallet payment options alongside card acceptance in both your point of sale and ecommerce checkout, your company will be ahead of the curve today and in the future.

New Technologies Are Changing the Way the World Shops.

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Sources:

1 “U.S. Mobile Retail Commerce Sales as Percentage of Retail E-Commerce Sales From 2017 to 2021,” Statista.

2 “Mobile E-Commerce Is Up and Poised for Further Growth,” Statista.

3 “Benchmark Report,” Montate.

4 – Ford Dayna, Khan Akif, The Future of Commerce Payments in a Digital Society, Gartner, Aug 2019, Print

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