Over the years, people and businesses have become more reliant on mobile devices and have been using mobile apps for banking and financial needs. The past decade has seen a significant shift from physical payments to digital or online payments. With mobile payments gaining popularity, financial services enterprises and banks have already started utilizing technologies like cloud, blockchain, AI, NFC, and more, to offer the best customer experience.
However, despite the popularity of mobile payments, there is still a need for implementing innovative technologies. So, how does the future of mobile payment look like in 2020? Here are the top five digital payment trends mobile wallet providers and other fintech providers must consider:
1. Mobile Wallets
To keep up with the trends, e-wallet platform is gaining traction with over 24% of customers using mobile wallets on a daily basis. In the coming 5 years, more and more digital wallet or e-wallet technologies will emerge, which will make mobile payments even more secure and expedient for users.
2. Artificial Intelligence-based Wallet Solutions
Artificial Intelligence (AI) or machine learning-based solutions are becoming highly useful for financial services firms to automate and execute financial transactions in real-time. Chatbots communicate with customers via voice or text messages to manage finances. Predictive analytics and big data understand consumer buying behavior and predict consumer spending behavior down the line and fight fraud being a secured platform. Similarly, it helps consumers provide timely information leading to increased engagement.
AI is certainly revolutionizing the way consumers utilize banking and fintech services through mobile payment applications.
3. Near-Field Communication (NFC) Payments
Contactless wallet solutions or NFC payments are perhaps the major reason behind the adoption and growth of mobile money. NFCs directly transfer funds in a secured manner and confirm transactions, so there’s no need for users to reveal their card information online or provide their physical credit/debit cards to cashier desks.NFC payments accounted for $75 billion of transactions in 2016 and is forecasted to jump to $500 billion by 2020.
4. Mobile Point of Sale
Mobile point of sale (mPOS) technology allows merchants to accept payments from virtually anywhere. This fastens the payment process as the sales staff is replaced with central checkout areas offering convenience and flexibility to make transactions. The demand for this is increasing to create a wireless economy.
5. International Remittances
Mobile money is experiencing rapid growth in international markets through international remittance, disrupting traditional banking and financial services. Mobile wallets are known to be a critical tool for this financial digital transformation that help reduce remittance costs. It is seen that emerging technologies such as Blockchain are becoming a cost-effective solution to transfer international remittances quickly.
The Mobile Future is Here
Innovations in mobile payments are likely to continue as the market is inclining towards a single digital payments ecosystem. Mobile money is becoming the preferred mode of digital payment because of the secured and ease of making a financial transaction. With this digitization, even banks and financial services firms have moved from customer service to customer engagement. We expect to see a new age of payment experiences in 2020 as customer engagement and contactless payments are becoming the norm. Additionally, the excursion of mobile payments, especially mobile wallets, is expecting drastic shifts in the coming years and will completely digitize the economy and represent the future of payment. If so, are we still hesitating to replace traditional wallets for mobile wallets?