The mobile payments industry has been looked upon as the new big thing, especially inside the Fintech space. It’s a trend that reaches millions of people and has the opportunity to truly capture the underbanked population. It can even be the end of the traditional wallet, we’re all so used to.
The Trends inside Mobile Payments
Although many still cling to their wallets, the mobile payments revolution has taken over many customers. Large players like Samsung, Google and Apple have already developed their own version of payment platforms. Recently, they have been designing new features such as fingerprint readers that provide a variety of options for users. These new features are designed not only integrate with the platforms of the companies, but also support future growth of mobile payments. Another trend of mobile payments is user deals and customer experience. Some of its main focuses remain the relationship between online and offline payments and the tailoring of offers based on purchase history information. This trend aims to change the relationship between retailer and consumer by making it more personalized. Finally, mobile payment companies have adopted a goal of making transactions easier. They build a large community that deals with payments without using chaotic cash. It’s not, however, only the big players that we should look into – many smaller companies are also developing payment methods compatible with both Android and iOs. Dwolla for example is creating a way to send money through a variety of platforms while Square Wallet is utilizing location-based merchant cards to make transactions effortless. FinLeap’s venture Valendo looks at the new trend from another perspective, offering financing solutions to bypass liquidity shortages using valuable assets.
The Evolution of Mobile Payments
A report by the Federal Reserve System in the United States reveals that 22% of all mobile phone users have made a mobile payment in 2014 – a growth by 17% from 2013.  The industry’s large growth means a demand for more tech companies that provide payment solutions. Big store chains such as Walmart are putting out their own platforms. Social media apps such as WhatsApp and Facebook have created their own e-commerce channels. It’s not only tech companies, however, that are being demanded; Fintech is seeing whole new trends being found because of Mobile Payments. Blockchain, cryptocurrency, and wearable tech are all sectors of Fintech that are being developed thanks to the growth in mobile payments. One of the largest areas of development for mobile payments has been Africa. Dozens of apps have searched for an innovative way to attract the African population to banking. Triggered by the low bank account membership, mobile payments provides a way for Africans to have banking services without opening a bank account. For example, M-pesa, a mobile phone-based money transfer, financing and micro financing service, is now being used by 22 million Kenyans. It’s potential has cast a shadow of opportunity for the market as more and more people become engaged in the mobile banking and payments industry.
The Future for Mobile Payments
Although many solutions are being developed, not all possible users are being attracted as customers of mobile payments. On one hand, large market such as the United States, Australia and the UK have adopted the credit card, but still have room to grow when it comes to contactless payments. On the other hand, mobile payments has been seen as the end to the cash era. We have become attached to our smartphones and thus, a natural extension to rely on them for payments as well has developed. Cash has been left behind and regarded as inefficient and even less secure while cashless payments provide multiple security barriers plus proof of purchase. The Fintech world has yet to see how grand the scope of mobile payments will become in the future.