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?
Beacons
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.
Hands-free 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?
Whitepapers
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