With mobile proximity payments projected to reach $92 billion by 2019, merchants and card issuers are reportedly rushing to release branded mobile apps that capitalize on both in-store and online payments growth.
According to Javelin, hundreds of new payment apps will flood the market by 2018, although fragmented payments apps are ultimately expected to converge into integrated solutions.
“Javelin expects this mobile payments convergence to take place in two waves — with mobile-online retail payments first, followed by the consolidation of P2P functionality into mobile wallets that presently work primarily in-store,” Javelin analysts stated in a recent press release.
“With one account, consumers will be able to meet all their needs online, in store and when paying a friend — significantly broadening the utility of a wallet app and simplifying the payment choice. Just as Amazon’s 1-Click checkout transformed the shopping experience online, users will seek out similarly streamlined wallet options to pay for everything, everywhere.”
As Emmett Higdon, Director of Mobile, Javelin Strategy & Research notes, mobile wallet convergence will create value by simplifying users’ choices when it comes time to pay.
“Banks and card issuers have a unique opportunity to simplify the purchasing experience by offering a single branded wallet solution that brings together mobile payments, money movement functionality, and account management capabilities,” he added.
Indeed, as we’ve previously discussed on Rambus Press, mobile payments offer a range of benefits for consumers, retailers and financial institutions. For consumers, mobile wallets provide a convenient, “tap and go” frictionless commerce experience that seamlessly integrates loyalty cards, boarding passes, ID cards, coupons, event tickets, alerts and notifications. For retailers, mobile wallets offer businesses the ability to engage users with an immersive, in-app experience that starts at the beginning of a retail journey and continues beyond, with notifications, reminders of upcoming expiration dates, archived digital receipts and a real-time tally of current loyalty bonus points. For banks, digital wallets, which are far more secure than credit or debit cards, have fast become a strategic focus as consumer interest ramps up.
When combined with evolving technology such as augmented reality, advanced Bluetooth beacons and biometrics, mobile payments will allow retailers to change an outdated brick-and-mortar paradigm and bolster their engagement with consumers. For example, shopping will become a truly interactive experience, as Bluetooth beacons scan digital profiles to generate recommendations on smartphones and wearables in real time. Items can also be scanned with mobile AR apps that overlay augmented information and display related items on top of existing products.
Meanwhile, next-gen biometric authentication, including iris scans and facial recognition, will evolve to meet industry expectations for quick, effortless and secure mobile payment transactions. Clearly, consumers require assurances that their mobile payment information will remain secure. Similarly, stores and financial institutions need to be confident that the technology behind mobile payments is secure and easy-to-use before it can be truly embraced. As such, mass adoption of mobile payments will only be achieved when there is a single, unified platform built on an economy of digital trust that ensures an uninterrupted physical to digital experience.