Next-Gen Payment Apps and Technologies

The present and future of payments

In recent months there’s been a lot of talk about the trend toward consumers using mobile wallets to make payments from their smartphones.  

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Next-Gen Payment Apps and Technologies

Jan 1, 2018

Next-Gen Payment Apps and Technologies

The present and future of payments

In recent months there’s been a lot of talk about the trend toward consumers using mobile wallets to make payments from their smartphones. According to a thought leadership paper produced by Forrester Consulting year, only 16 percent of consumers have used mobile wallets, though that seems destined to change as: more and more merchants accept them (only 36 percent of merchants reported accepting mobile wallets in the mentioned survey report); and merchants begin incentivizing consumers to use them. As we noted in our recent post on mobile wallets  there are good reasons for merchants to encourage digital spending, including higher average purchase amounts and a better connection with customers.

Mobile Wallet Apps

But even as more and more consumers begin using device- or operating system-specific mobile wallets (like Apple Pay®, Android Pay, and Samsung Pay®)—which can be used to make contactless payments thanks to near field communication—retailer and brand-specific wallet apps are gaining in popularity (think: Walmart Pay and the Starbucks® wallet app). 

Soon, one can expect to see more mobile app startups, like KeyRing™ which enables you to keep all of your loyalty and membership cards in one place, as well as eWallet® which allows you to encrypt and store account numbers and information ranging from your passport to your loyalty cards.    

Person to Person (P2P) Electronic Payments

Another trend involves the rise in popularity of person-to-person (P2P) payments—“an online technology that allows customers to transfer funds from their bank account or credit cards to another individual’s account via the Internet or a mobile phone,” according to investinganswers.com  which notes that P2P payments can be facilitated by either a trusted third party or online interface or mobile app. 

According to Javelin Strategy & Research, more than 129 million U.S. consumers are expected to use P2P services by 2021, driven heavily by millennials and Gen Z, both of whom generally regard exchanging cash and paper checks with friends, relatives and associates to be annoying and tedious. 

There are already more than a dozen P2P payment services and apps to choose from, including PopMoney, which allows users to send, request and receive money via their mobile device, and Zelle, which allows you to send money with no download necessary, assuming you already have the app of one of its bank or credit union partners downloaded on your mobile device.

Bitcoin and Other Cryptocurrencies

Meanwhile, it may not be long before we see one or more cryptocurrencies become widely utilized by consumers and accepted by merchants. One challenge, though, is determining which cryptocurrencies will survive in the marketplace, much less emerge as a winner. (As of this writing, there are 1,340 currencies listed at coinmarketcap.com led by Bitcoin, Ethereum, Bitcoin Cash, IOTA and Ripple. As we noted in our recent update on merchants’ acceptance of cryptocurrencies liquidity and tax law are just two of the most significant issues that remain to be resolved before widespread acceptance of cryptocurrencies is likely to be realized.

Today, it’s enough of a challenge simply to select the best bitcoin wallet with the options including hardware, software and paper, and the cost ranging from free to more than a hundred dollars.

Wearable Payment Solutions

If that’s not enough to think about, you may soon be hearing more about wearable payment solutions—“Apple Pay for the Apple Watch® is the first big effort at enabling payment with the wrist,” says Tractica, a market intelligence firm that focuses on human interaction with technology—with NFC, radio frequency identification (RFID) or quick response (QR) codes functioning as the enabling technologies. And it’s conceivable that one day we’ll all be making payments via chips implanted into our bodies; an Amsterdam-based Bitcoin entrepreneur recently made headlines when he had a miniature communications chip implanted in his hand.

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