A recent Square survey cited by Business Insider found that 45% of millennial respondents (18-34) have made an NFC payment. According to Business Insider, the poll is a “good indicator” of where mobile payment adoption is headed, with the publication forecasting a compound annual growth rate (CAGR) of 80% through 2020 to reach $503 billion.
In addition, the integration of loyalty programs and increased reliance on mobile wallets for features such as in-app payments is expected to accelerate both adoption and use over the next few years. Indeed, a separate poll commissioned by Urban Airship found that loyalty cards and coupons are particularly important to consumers, with 67% of respondents requesting the former and 62% wanting the latter. Meanwhile, a new study by Javelin Strategy and Research cited by MediaPost confirms that monthly consumer adoption of mobile wallets has nearly doubled from 11% to 21% in three years. And according to a September 2016 report published by Bank of America, mobile wallets experienced 267% growth amongst millennials and 252% growth for Gen X (year over year).
In terms of allaying security concerns over mobile transactions, Business Insider notes that the top mobile wallets on the market are “perhaps more secure” than chip payment cards because they authenticate not only the device used for a transaction, but also the individual using the device via fingerprint recognition or other biometric methods such as iris scanning.
Moreover, tokenization protects mobile payment credentials by replacing them with a randomly generated number that resembles the customer’s primary account number (PAN). The unique identifier, known as a ‘payment token’ or ‘tokenized PAN’, is worthless if stolen, as it acts as a reference for a consumer’s original card data which only the card networks and the consumer’s bank can map back to the original account.
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