Usage of mobiles for payments and banking is on the rise. That’s according to a slew of new figures and studies from around the world that have emerged in the past few weeks.
Long on promise but short on delivery until recently, mobile is becoming an important battlefield in the world of payments not only in the sense that it is competing with other form factors such as contactless and debit cards, wearables and the ever-resilient cash, but also internally between technologies that can change the way, and the distance at which, we pay.
NFC technology has undoubtedly been the big winner of recent times: revolutionising the payment card and expanding its reach significantly. After some false starts, the technology’s integration in things like public transport networks – London in particular – means it is becoming ever more commonplace in our every day lives.
- Number of mobile banking users around the world rises to 47%
- France is doubling down on mobile payments
- How we pay in the USA: Mobile payments
- The UK will abandon cash within 20 years
NFC has transformed how often we pay, with the gradual replacement of the traditional ‘weekly shop‘ in favour of more frequent, lower-value trips helping pave the way.
It is also another reason not to put our phones down: we now can use phones to pay for things directly in front of us, adding to the capability of buying things that are thousands of miles away.
However, NFC technology has its limitations. Its simplicity is simultaneously an advantage and a drawback: we can pay at a shop using NFC technology in seconds…but we can’t do much more than that.
NFC can’t automate payments for customers: a hand is still needed to reach for a card or phone and a contactless POS terminal is still needed. There is still, albeit minimal, friction.
With payments technology becoming more and more complex – amusingly in pursuit of making payments simpler – are there any challengers that could topple NFC technology as the most popular digital way of paying? Perhaps one that could offer a more comprehensive payment experience?
Source: Brands on Digital
As the infographic shows beacons have the capacity to offer a much more varied payment experience than the tap-and-go capability of NFC. A larger range means more flexibility and reduces the friction of making payments.
In fact, frictionless payments has been one of the big USPs of beacons. Interest in the technology has been taken to another level by companies such as Google, which has tested this year hands-free payments. Called ‘Hands Free‘, the tech uses Bluetooth low energy, Wi-Fi, and location services on your phone to detect whether you’re near a participating store.
Customers tell tell the cashier, “I’ll pay with Google.” The cashier will ask for initials and use the picture of the customer added to their Hands Free profile to confirm identity.
Another company that has been testing beacons is Droplet, a British startup, whose whole ethos is taking the payments out of payments. In an interview with PaymentEye at Money20/20 Copenhagen, the company’s CEO, Steffan Aquarone, is extremely positive about the tech, summarising its incredible payments potential in one sentence:
“It’s like having a tab in every business.”
With descriptions like that, is NFC’s future uncertain?
Eastern Europe is still very much a region finding its identity following the breakdown of the Soviet Union over 20 years ago. Countries in the region are at various stages of economic growth and payments infrastructure development, and the e-commerce landscape looks different as you cross borders.
The failure to keep pace with expanding compliance procedures has seen a rise in the number of financial penalties issued by regulators over the past few years. As anti-money laundering (AML), know-your-customer (KYC), counter-terrorism financing and other compliance obligations expand across different territories, organisations large and small have struggled to maintain adequate and comprehensive safeguards – often resulting in sizable fines and significant reputational damage.
Andrew Quartermain, VP Sales at ACI Worldwide, explains that the growth of e-commerce and the rapid rise in the popularity of smartphones has played a big part in driving retail change, with today’s consumer now able to browse, compare, buy, receive and review products at their convenience, wherever they are. Highly connected consumers are demanding a more personalized and seamless shopping experience, wherever and however they choose to shop - and retailers have had to undertake a shift from paper to digital technologies to keep up with this demand.
The Global Business and Spending Outlook looks positive for the B2B payments industry.