The problem world of mobile payments - how to put it in order
It is predicted that by the end of this year, mobile payments will grow by 210% in the United States. Despite this impressive growth, it turns out that many people do not use mobile payments.
Indeed, in a recent study on eCash, we found: “In the US, only approx. 1 person out of 5 (20.7%) who have an iPhone capable of working with Apple Pay (it would have been an iPhone 6 or newer), at least once used this application. ”
To add salt to the wound: Tech Insider also found that 56% of users "used Apple Pay only once during a typical week, and 15.3% did not use it at all during the week."
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Why isn't the number of people enjoying the convenience and ease of mobile payments as large as it could be? There are always numerous reasons for differences in the behavior of people in the world of information technology. In the world of mobile information technology — where the monetary system is now becoming commonplace, becoming generally accepted for exchanging money and payments — there seems to be some wariness.
Some say that this money exchange system in the mobile world broke down before it began to work. But is this statement correct? Let's turn to some of the concerns that arise when considering mobile payments.
Perhaps the biggest concern about mobile payments is about security. At the Money 20/20 conference in 2015, Brian Yeager, an analyst at eMarketer Inc., announced that “in 2016, it is planned to bring the number of users of mobile payment systems to 37.5 million, i.e. get an increase of 62%. "
However, it seems that security considerations still impede the implementation of some mobile payment systems. Ieger told the audience that "57% of American Internet users called security problems the main reason why they did not decide to use mobile payment services." He also said that "62% of US smartphone owners who do not use or plan to use a mobile wallet called security concerns the main reason for this."
International compatibility is another issue when using mobile payments. Mr. Raomal Perera, CEO of Valsita, says: “The reality is that until common interfaces based on current standards are defined, users will not be properly involved in commercial operations with mobile payments. Only after solving this task, consumers will see the advantages of using their mobile phone as an “electronic wallet”, which will allow them to carry out calculations more conveniently than it is done through more traditional channels.
Once the global standard is adopted, consumers will be able to “use any application without having to install new software with every purchase,” adds Perera. This will simplify the purchasing process and give impetus to innovation.
The lack of a global standard is also an obstacle to the use of mobile payment systems when traveling abroad. For example, Vodafone's M-Pesa system may work fine in many parts of Africa, but users would have difficulty using it in Europe.
Visa is trying to solve the financial problems that inevitably arise when traveling to other countries, with the help of its Digital Support Program (VDEP). The United States currently accepts EMV (Europay, MasterCard and Visa), which allow you to forget about this problem. The future of mobile payments will be much more attractive if Visa, MasterCard and AMEX agree, but at present no standard is being developed.
What happens when a mobile application closes or you are not satisfied with the service? You think you can easily uninstall this application. But this may not always be realized. The first adherents of mobile wallets used such an application as Softcard, whose work was later discontinued, and users could not uninstall this application.
Publication PaymentsSource states: “When a mobile wallet stops working, it does not go away. The company can update the “dormant” application and remove its functionality, but the application will remain on the user's phone. "To get an idea of ​​the problem" first hand ", just look at the" Wallet "application on your iPhone. It is likely that everyone reading this The article has a mobile wallet application on its iPhone - and cannot delete it. Why?
If you are a salesperson who looks at the idea of ​​accepting mobile payments, you have various options: NFC, code-based and cloud-based. Depending on the region and clientele, each option has its pros and cons, which can make it difficult to choose.
For example, if you recently purchased a new EMV POS system equipped with an NFC reader, then why should you invest in a system based on code or a cloud? But what if a significant portion of your customers prefer systems based on code or the cloud? Do you want to invest in these systems? Obviously, the answer would be to find out the percentage of your customers who are asking for or requiring some specific system to use your product or service.
According to research conducted by The Pew Charitable Trusts, part of the population is satisfied with their current banking system, because they feel it is safer and less complex than mobile payments. Additionally, people who do not use the mobile payment system also enjoy the incentive benefits that their credit or debit cards provide to them.
Until more people feel that security problems have been resolved, and until people learn how to easily use mobile systems, until then mobile payment systems will remain a heavy object to sell to customers with established habits.
Despite the convenience and potential that mobile payment systems currently possess, there is still enough room for improvement. And these areas require new approaches. According to Bijan Hosrevi, founder and CEO of InBounce, the innovations may be as follows:
Peer to peer payments. The ability to send money to people directly and simply when using your mobile device already exists thanks to applications such as Venmo, Dwolla, Due (staff company) and even Facebook Messenger. Apple is also included in this operation. The Wall Street Journal states that Venmo is already "recognized by young people and teenagers, who especially like the opportunity to put their payments on social media posts."
The plastic will go away. Smartphones will collect your credit or debit cards in one place, saving you from having to carry them. This also applies to gift cards. Google Wallet and Apple Pay are already using this technology; LoopPay is another interesting option that also stores gift and bonus cards.
Centralized incentive points. To remove customers from traditional premium systems, merchants can use a centralized network by accepting bonus rewards from each other. For example, a customer may use the flight miles earned by Delta for his purchases at Starbucks coffee company.
Charity contributions will be developed. People will have the opportunity to make donations to socially responsible projects like never before. HandUp, for example, is a startup that allows you to see the profile of a person in need of financial assistance, and donate money to a specific person through this profile or SMS.
Virtual banks will replace the traditional ones. After some time, we no longer need to physically come to the bank to open an account and perform the banking operations we need. This will be especially important for the population that has not yet been covered by banks, which previously did not have the funds or the opportunity to actually visit the bank. It will also help employers to pay employees who do not have a bank account; DoPay application is a payment solution that performs this task.
But what about the situation that causes the greatest suspicion regarding mobile payments: security?
Currently, some companies, such as Android, have introduced something called “host card emulation” (HCE). Bell ID describes HCE as “a technology that emulates a payment card on a mobile device using only software. This approach offers technical and commercial advantages to a wide range of mobile market players operating in the short-range wireless communication ecosystem (NFC). ”
Previously, mobile payment identification data was stored on a device in a hardware element known as a security element (special chip). With HCE, this security element is now outside the device. This - at a low cost - increases safety by eliminating the participation of third parties.
Another company focused on mobile payment security is ID Global Solutions Corporation with its IDComplete product. This company claims to be able to prevent theft, as “IDComplete uses a secure, encrypted, irreversible tokenization process with multifactor identification to ensure secure, real-time authentication of the cardholder.”
In addition, the development of technology can lead to even more interesting developments in the payment industry. One of the most widely discussed innovations in the world of mobile payments is cryptocurrency, such as bitcoin and blockchain. Blockchain is estimated to save global companies up to $ 550 billion a year. Companies such as IBM, Intel, Cisco, JP Morgan, Wells Fargo, and State Street have now created their own global online accounting book called the Open Ledger Project. The hope is that this blockchain, along with other changes "will provide a safer, more reliable, more transparent and more automated way of exchanging money, securities and other assets."
In addition, as it is said in the magazine “Wired”, “this will allow trading assets as easily as transactions are performed using e-mails today,” it will be possible to operate with them, without delegating it to any individual or organization. This could eliminate the many slow technologies and expensive intermediaries that clog today's markets. ”
In the end, the time will come when the cards and mobile wallets stored on our smartphones will cease to exist. Many companies are experimenting with biometrics as a solution to the security of payments. This can include everything from fingerprints to face recognition and heartbeat as a way to identify the payer.
Regardless of the obstacles that need to be dealt with, it seems that our capabilities in mobile payment systems are only increasing. Companies and individual developers are faced with the need to solve some problems and tasks surrounding the world of mobile payments. By setting goals, looking for answers and solving questions that have been raised, companies will be able to remove the doubts of their users by providing optimal solutions for the convenience of making mobile payments.
Indeed, in a recent study on eCash, we found: “In the US, only approx. 1 person out of 5 (20.7%) who have an iPhone capable of working with Apple Pay (it would have been an iPhone 6 or newer), at least once used this application. ”
To add salt to the wound: Tech Insider also found that 56% of users "used Apple Pay only once during a typical week, and 15.3% did not use it at all during the week."
')
Why isn't the number of people enjoying the convenience and ease of mobile payments as large as it could be? There are always numerous reasons for differences in the behavior of people in the world of information technology. In the world of mobile information technology — where the monetary system is now becoming commonplace, becoming generally accepted for exchanging money and payments — there seems to be some wariness.
Some say that this money exchange system in the mobile world broke down before it began to work. But is this statement correct? Let's turn to some of the concerns that arise when considering mobile payments.
Safety, security and safety again
Perhaps the biggest concern about mobile payments is about security. At the Money 20/20 conference in 2015, Brian Yeager, an analyst at eMarketer Inc., announced that “in 2016, it is planned to bring the number of users of mobile payment systems to 37.5 million, i.e. get an increase of 62%. "
However, it seems that security considerations still impede the implementation of some mobile payment systems. Ieger told the audience that "57% of American Internet users called security problems the main reason why they did not decide to use mobile payment services." He also said that "62% of US smartphone owners who do not use or plan to use a mobile wallet called security concerns the main reason for this."
Lack of global standard
International compatibility is another issue when using mobile payments. Mr. Raomal Perera, CEO of Valsita, says: “The reality is that until common interfaces based on current standards are defined, users will not be properly involved in commercial operations with mobile payments. Only after solving this task, consumers will see the advantages of using their mobile phone as an “electronic wallet”, which will allow them to carry out calculations more conveniently than it is done through more traditional channels.
Once the global standard is adopted, consumers will be able to “use any application without having to install new software with every purchase,” adds Perera. This will simplify the purchasing process and give impetus to innovation.
The time will come when the cards and mobile wallets stored on our smartphones will cease to exist.
The lack of a global standard is also an obstacle to the use of mobile payment systems when traveling abroad. For example, Vodafone's M-Pesa system may work fine in many parts of Africa, but users would have difficulty using it in Europe.
Visa is trying to solve the financial problems that inevitably arise when traveling to other countries, with the help of its Digital Support Program (VDEP). The United States currently accepts EMV (Europay, MasterCard and Visa), which allow you to forget about this problem. The future of mobile payments will be much more attractive if Visa, MasterCard and AMEX agree, but at present no standard is being developed.
Difficulties with uninstalling mobile wallet applications
What happens when a mobile application closes or you are not satisfied with the service? You think you can easily uninstall this application. But this may not always be realized. The first adherents of mobile wallets used such an application as Softcard, whose work was later discontinued, and users could not uninstall this application.
Publication PaymentsSource states: “When a mobile wallet stops working, it does not go away. The company can update the “dormant” application and remove its functionality, but the application will remain on the user's phone. "To get an idea of ​​the problem" first hand ", just look at the" Wallet "application on your iPhone. It is likely that everyone reading this The article has a mobile wallet application on its iPhone - and cannot delete it. Why?
Mobile technology remains fragmented.
If you are a salesperson who looks at the idea of ​​accepting mobile payments, you have various options: NFC, code-based and cloud-based. Depending on the region and clientele, each option has its pros and cons, which can make it difficult to choose.
Mobile payment systems will remain a heavy object for sale to customers with well-established habits.
For example, if you recently purchased a new EMV POS system equipped with an NFC reader, then why should you invest in a system based on code or a cloud? But what if a significant portion of your customers prefer systems based on code or the cloud? Do you want to invest in these systems? Obviously, the answer would be to find out the percentage of your customers who are asking for or requiring some specific system to use your product or service.
Habit - second nature
According to research conducted by The Pew Charitable Trusts, part of the population is satisfied with their current banking system, because they feel it is safer and less complex than mobile payments. Additionally, people who do not use the mobile payment system also enjoy the incentive benefits that their credit or debit cards provide to them.
Until more people feel that security problems have been resolved, and until people learn how to easily use mobile systems, until then mobile payment systems will remain a heavy object to sell to customers with established habits.
The future of mobile payments
Despite the convenience and potential that mobile payment systems currently possess, there is still enough room for improvement. And these areas require new approaches. According to Bijan Hosrevi, founder and CEO of InBounce, the innovations may be as follows:
Peer to peer payments. The ability to send money to people directly and simply when using your mobile device already exists thanks to applications such as Venmo, Dwolla, Due (staff company) and even Facebook Messenger. Apple is also included in this operation. The Wall Street Journal states that Venmo is already "recognized by young people and teenagers, who especially like the opportunity to put their payments on social media posts."
The plastic will go away. Smartphones will collect your credit or debit cards in one place, saving you from having to carry them. This also applies to gift cards. Google Wallet and Apple Pay are already using this technology; LoopPay is another interesting option that also stores gift and bonus cards.
Centralized incentive points. To remove customers from traditional premium systems, merchants can use a centralized network by accepting bonus rewards from each other. For example, a customer may use the flight miles earned by Delta for his purchases at Starbucks coffee company.
Charity contributions will be developed. People will have the opportunity to make donations to socially responsible projects like never before. HandUp, for example, is a startup that allows you to see the profile of a person in need of financial assistance, and donate money to a specific person through this profile or SMS.
Virtual banks will replace the traditional ones. After some time, we no longer need to physically come to the bank to open an account and perform the banking operations we need. This will be especially important for the population that has not yet been covered by banks, which previously did not have the funds or the opportunity to actually visit the bank. It will also help employers to pay employees who do not have a bank account; DoPay application is a payment solution that performs this task.
But what about the situation that causes the greatest suspicion regarding mobile payments: security?
Currently, some companies, such as Android, have introduced something called “host card emulation” (HCE). Bell ID describes HCE as “a technology that emulates a payment card on a mobile device using only software. This approach offers technical and commercial advantages to a wide range of mobile market players operating in the short-range wireless communication ecosystem (NFC). ”
Previously, mobile payment identification data was stored on a device in a hardware element known as a security element (special chip). With HCE, this security element is now outside the device. This - at a low cost - increases safety by eliminating the participation of third parties.
Another company focused on mobile payment security is ID Global Solutions Corporation with its IDComplete product. This company claims to be able to prevent theft, as “IDComplete uses a secure, encrypted, irreversible tokenization process with multifactor identification to ensure secure, real-time authentication of the cardholder.”
In addition, the development of technology can lead to even more interesting developments in the payment industry. One of the most widely discussed innovations in the world of mobile payments is cryptocurrency, such as bitcoin and blockchain. Blockchain is estimated to save global companies up to $ 550 billion a year. Companies such as IBM, Intel, Cisco, JP Morgan, Wells Fargo, and State Street have now created their own global online accounting book called the Open Ledger Project. The hope is that this blockchain, along with other changes "will provide a safer, more reliable, more transparent and more automated way of exchanging money, securities and other assets."
In addition, as it is said in the magazine “Wired”, “this will allow trading assets as easily as transactions are performed using e-mails today,” it will be possible to operate with them, without delegating it to any individual or organization. This could eliminate the many slow technologies and expensive intermediaries that clog today's markets. ”
In the end, the time will come when the cards and mobile wallets stored on our smartphones will cease to exist. Many companies are experimenting with biometrics as a solution to the security of payments. This can include everything from fingerprints to face recognition and heartbeat as a way to identify the payer.
Regardless of the obstacles that need to be dealt with, it seems that our capabilities in mobile payment systems are only increasing. Companies and individual developers are faced with the need to solve some problems and tasks surrounding the world of mobile payments. By setting goals, looking for answers and solving questions that have been raised, companies will be able to remove the doubts of their users by providing optimal solutions for the convenience of making mobile payments.
Source: https://habr.com/ru/post/299240/
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