Mobile payment is on the rise. A couple years back, it was already possible to pay for goods or services with your mobile phone. You had to have either a phone with an SMS function (SMS Payments) or the bill was charged to your account (Direct Mobile Billing). With today’s technology, we have come a lot further. MasterCard, Europay, and Visa, leaders of the growing trend of mobile payment, have been pushing to create a standard for the modern method of commerce, so that mobile payment can be easily accessible on a global level. MasterCard even claims that, under the banners of convenience and security, their technology will create a world in which we will one day never even think to withdraw money from an ATM or stand in line to buy a train ticket. Instead we’ll just tap a button.
Methods of mobile payment
Two methods of mobile payment that should turn this idea for the future into the present, are NFC Payments and WAP Payments. The first, Near Field Communication, lets phones communicate with a nearby NFC object, using radio frequency. In this case, phones don’t have to touch the point of sale; they only have to be very close. In addition, Samsung and Apple just launched their forms of mobile payment. The newest development of ‘paying without touching’ is the payment through smartwatches instead of phones. The system works on NFC technology and designed to be more convenient for its users, as customers no longer have to reach for their phone. The second, Wireless Application Protocol, allows phones to pay through connecting to the Internet. For WAP, online payment methods such as PayPal, Google Wallet, Yahoo Wallet, or entering credit card information on website can be used. All these new forms of payment have similar goals; they want to improve convenience, simplicity (through one system), and security, for both consumers and companies.
Expanding digital commerce world
Card companies like MasterCard has plans to take mobile payment a step further. The company has plans to unveil new ways to turn all personal devices into channels for commerce. This means that cars, gaming consoles, etc. will all become branches for companies to sell you their products, opening up many new ways for people to access shopping services. So instead of only creating convenience and security for customers, mobile payment also introduces opportunities for companies’ marketing and sales teams. In addition, the company is hoping to bring progress in the area of financial inclusion, aiming to offer their mobile services at a reasonable price to areas of the world with socioeconomic disadvantages. By working with companies in less developed countries like EcoCash in Zimbabwe, a technique that allows people to receive money in MasterCard accounts that can be used to pay for products, MasterCard is truly attempting to penetrate all areas of our global society with digital commerce.
Shifting trends
Mobile payments have raised the question of whether cash, debit cards and credit cards will one day become obsolete. Ed McLaughlin, chief officer in charge of mobile payments of MasterCard, has not expressed an explicit belief that traditional payment methods are being phased out, but there definitely is a visible trend towards a society with digital, seamless commerce. While he says he hopes that a retail transaction one day can be completed with a tap of a button or the swipe of a phone or watch, he also says that society naturally optimizes towards what works best.
Based on that thought, combined with the belief that human beings always search for efficiency and convenience, we observe a shift towards more user-friendly ways of payment. At this moment, these types of payment are mostly done by phone or online, but smartwatches are gaining market share. As mobile payment tends to be more accessible and faster for both consumers and companies, it appears to be only a matter of time until it is the main way of paying. Or can the risks of security breaches become a problem in the future?
What do you feel about the different forms of mobile payments as well as the shift of trends towards the new forms of payment methods?
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