Smartphones with their development have replaced few things we grew with, the alarm clock, the watch, tape recorder, music players and several items more. Soon we will see how use of physical cash becomes nonexistent. Today we can add cash and wallets to this list of obsolete things, because the payment methods are being revolutionized. The payment methods are morphing through different channels: cash to cheques, credit cards to debit cards and now e-payment, m-payment. According to the World’s Payment Report of 2014 by RBS and Capegemini, the continued growth in mobile payments is putting strong pressure to stakeholders of the electronic payment industry. Banks and other financial institutions have to adapt to these payment channels while ensuring the safety and security of customers. As per this report, mobile transactions are expected to grow by 60% in 2015 and e-payment transactions to grow by 16%.
There are about 6 billion mobile subscribers in the world among which 1 billion currently accounts for Smartphone users. It will be just a matter of time, when we leave our wallets at home, and choose a digital wallet for making all purchases, even pay the rent.
There is still an ongoing debate as to what should we call these cashless wallets. With suggestions and name like virtual wallet, e-wallet, digital wallet and electronic wallet, people face more confusion in using them. Regardless of the name, they all work the same way. To activate virtual wallet, all a person has to do is download an application on their phone and link the service of the application account to the payment card or bank account. Once this is done, users can start paying for their purchases through this digital wallet.
How Do You Pay
The payment process is easy and is done through different methods. If you are using an NFC enabled phone, you can tap the phone at the card terminal at the checkout counter as you would do with your debit card. Now, not all phones have an NFC feature. For these phones, the payment procedure is quite different. A person needs to have login through the payment application and make payment. Applications like Square Wallet, allows you to pay just by saying your name to the cashier. System like ERPLY allow you to check in store and assist cashier identify through facial recognition. Many such applications are present today that makes m-payments easy.
Alternative Payment Methods
If you are a cautious person and prefer to keep all financial details at separate counters, in case you lose the Smartphone, then there are alternate payment methods to use.
Carrier billing– The idea here is to charge your mobile carrier for all your online purchases and then clear them at the end of the month with the phone bill. This method is beneficial for Smartphones users and for people who do not use an advanced phone. Having a simple mobile is enough as you can pay through sms. In such system, verification and security is ensured through authorization pins, text to punch or may be through one-time confirmation password.
Solution for Credit Card Users
Many people do not like using credit cards. For them application like Dwolla and Venmo can be used to transfer cash instead. This way you can only use the cash that is present in your account rather than using your credit card. In addition, you can also transfer a small sum from your savings account to such accounts and then use it to make smaller payments like paying for the train ticket, or clear any outstanding debt.
Loyalty Management through Digital Wallets
We all carry a load of loyalty cards with us whenever we go for shopping. Every store these days have loyalty cards, which is offered during a purchase. Every time a person makes a purchase, the loyalty card is used to add or deduct points. Digital wallets assists in carrying these loyalty cards too, so you do not have to carry them around, especially when you are going to use them only once a month. There are applications present for mobiles that can store the information of the card and generate a barcode. The cashier can use a barcode scanner to scan this code and deliver the rewards. Some other applications allow users to use platforms like LevelUp and Perka to ensure flexibility and customized reward points. Digital wallets allow us to use everything at one place, including loyalty cards from various merchants.
Is M-Payment Secure?
After knowing about all these different m-payment options and application, you would like to know about the security offered during transaction. When you are using your mobile phones for m-payment, you are storing all information and important data to your Smartphone. What happens if you lose the phone, or someone else gets hold of it? All the details in the digital wallet are well protected by a pass code, which gives an extra layer of protection to the phone. Any data stored can be remotely deactivated or wiped out. However, it is always advisable to check with customer reviews related to the coverage of the platform before you install and link all your data.
Mobile payments and digital wallets are becoming very popular every day. For people already using this method, payment experiences have never been so smooth. Several e-commerce companies have already adapted to the various mode of online payment. It is not far, when all stores and every individual would be using cashless payment methods for all monetary transaction. Mobile payment solutions are safe and with time, they would have extra layer of security for more protection. If you are already using mobile payment solutions, share your experience with us on our Twitter and Facebook page. We are eager to here.