Saturday, 19 March 2016

Cards or Mobile payments ? Choice is yours !!

Today number of people having mobile phones on planet, is much bigger than bank account holders or credit card holders globally.

Mobile phones have already become integral part of our lives, often taking the place of alarm clocks, calendars, cameras, calculators, movie tickets or paper tickets from airlines. What they haven’t replaced yet is hardcore money.

As part of Digital Transformation, 2015 was the year when mobile payments happened. We now have Apple Pay, Android Pay, Samsung Pay, LG Pay, Microsoft Pay, Walmart Pay, CurrentC / MCX, Chase Pay, with a few more on the horizon.

Mobile payments are gaining momentum and, as more options become available, usage is set to surge.

Consumers are adopting mobile wallet apps, branded wallets, smart watches and devices with payment capabilities.

In order to make a mobile payment, most applications require several layers of authentication, and many also need a biometric authentication in the form of fingerprint or facial recognition via selfie. This is on top of the tokenization technology, which replaces transmitting personal information with an encrypted code, to process the payment.

Consumers can make three types of payments with a mobile device:
  • Person-to-person transfers initiated from a mobile device
  • The second is for goods and services purchased over the Internet on a mobile device.
  • The third is mobile payments at a point of sale (POS), such as a grocery stores, restaurants, or gas stations.

     There are 3 different technologies for mobile payments:
  • Near field communications (NFC) is a short-range, high-frequency, standards-based wireless communication technology that enables exchange of data between devices in close proximity (less than two inches to four inches). Consumers can send mobile payment by keeping their mobile near the NFC reader.
  • QR code or 2D barcode is a two-dimensional barcode containing more information than a conventional one-dimensional linear barcode. 
  • Beacon based payments when connected with mobiles on Wi-Fi or Bluetooth.

Current technologies and players:
  • Apple Pay – came in 2014, NFC based payments
  • Paypal – QR code and beacon based payments
  • Google Wallet – came in 2011 and now called Android Pay also testing hands free payment via Bluetooth
  • CurrentC – QR code based payments
  • Samsung Pay – came in 2015
  • MasterCard is coming out with biometric authentication or selfie pay
  • Chase pay in partnership with Starbucks

The apps used by Starbucks and Uber offer a high level of customer service and intimacy, and represent real value for the merchant and the customer alike.

But mobile payments will give rise to tons of Big Data on shopping behavior & preferences, enabling more sales opportunities via targeted marketing.

One of the biggest benefits of using a mobile payment option is the ability to integrate loyalty and incentive programs into the mobile payment applications. Instead of customers having to keep up with punch cards or key ring tags, all of their information is stored in the application each time they make a purchase with their mobile device.

For end consumers they help in speedy checkouts, improved experience, better security & reward opportunities.  

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