Why Phone-Based Transactions are the Future of E-commerce
Categories: Investments
Why Phone-Based Transactions are the Future of E-commerce
In the realm of e-commerce, phone-based transactions are becoming more and more common, and this trend is anticipated to continue for a number of reasons:
Convenience: People always have their mobile phones with them and use them wherever they go. Customers may quickly make purchases using phone-based transactions from any location without having to sit at a computer or go to a physical store.
Security: As technology has advanced, mobile devices have grown more secure. Two-factor authentication and biometric authentication make it more difficult for hackers to access private data. Customers are more at ease utilising their phones to complete purchases as a result.
Speed: Phone-based transactions can be finished fast. For example, users can make purchases with just a few taps on their phone using payment systems like Apple Pay and Google Pay.
Personalization: By tailoring phone-based transactions to the user's preferences and past behaviour, customers can more easily locate what they're looking for and finish their purchases more quickly.
Customer service and loyalty programmes, for example, can be connected with phone-based transactions to give users a seamless and effective experience.
A mobile payment is what?
Money can be transferred via a phone or tablet for mobile payments. Prior to gaining more traction in North America, this approach was first embraced in Asia and Europe.
In order to accept mobile payments, PayPal and Apple Pay introduced a barcode in 2014 that could be read by a store's barcode scanner. A contactless credit card terminal was tapped by mobile devices to collect payments as a result of later improvements.
Some people believe that carrying actual debit or credit cards can be effectively replaced by this contactless payment technique. Compared to the norm, it is quicker, more dependable, and more secure.
Even before humans become civilised, money, riches, and the concept of possession have always been of the utmost significance to people.
Over the years, there have been some significant modifications to the way payments are made.
The method of payment in many ways reflects where our civilization is at this moment. The earliest kind of payment we are aware of was bartering, which involved a straightforward exchange of commodities or services. But it was time-consuming, imprecise, and ineffective.
When we began to live in a more linked, established, and organised way, our payment method underwent changes.
We switched from the barter system to representational money (shells, gold, and silver), which quickly developed into coins.
As time went on, we got better at identifying more advantageous and effective payment options. The transition from coins to paper money served as proof.
Later, paper money changed into the fiat currency that is now used in the majority of the world.
Mobile payment trends in 2023
Many financial services are now widely accessible thanks to the rise of digitalization. According to a PwC report, 86% of respondents concur that traditional banking organisations would collaborate with fintech and digital enterprises as a primary source of innovation. Cashless transactions are expected to increase in number by 2030, thus they may very well become the norm.
As a result, the following new mobile payment trends are likely to emerge and influence the market:
Mobile wallets: The simplicity of use of mobile wallets is the key factor contributing to their popularity. Users only need to provide their bank account information and download a mobile app. After identity verification, users can immediately make purchases online or in person.
Mobile wallets enable contactless payments using mobile payment apps by utilising near-field communication (NFC), a technology that enables data to be transmitted over relatively small distances.
Contactless payments: As the name implies, contact between the device and the scanner is not necessary for contactless payments. Customers can pay by waving their phones or tapping a credit card over the reader.
Buy now, pay later: Before, retailers would offer special deals like "buy now, pay later" (BNPL) to persuade customers to make a purchase. Yet more lately, it has developed into a staple service.
Similar to credit cards, this method of financing allows you to bypass credit checks, cheaper interest rates, and other expenses.
Customers only need to enter a phone number or email address to send money while keeping their bank information confidential.
MPOS technology: The use of mobile point-of-sale (mPOS) technology has grown in popularity along with the introduction of mobile payments. As a result, systems for processing credit card payments are now also portable. These gadgets have a unique wireless system that enables them to perform the same functions as standard sales terminals and cash registers.
According to a survey by Future Market Insights, the mPOS market would develop at a compound annual growth rate (CAGR) of 20.9 percent from 2022 to 2032, reaching $140.2 billion during the next ten years.
Cryptocurrency & cross-border digital payments: Several firms have expanded internationally as a result of the rise of e-commerce, necessitating the activation of cross-border payments. These payment options use intermediaries, who frequently charge exorbitant fees.
Traditional methods have a number of limitations, such as short operation hours and a lack of transparency, which apply to transactions. According to numerous research, using bitcoins for overseas payments and remittances can save fees. According to a poll conducted by Wirex and the Stellar Development Foundation, 52% of respondents think cryptocurrencies are a great alternative to more conventional methods of moving money abroad.
The survey also revealed that 53% of respondents thought that typical payment methods' overseas fees were excessively costly.
The majority of international payment solutions include expensive fees and unfavourable exchange rates. The sales and income of companies with worldwide clients may be considerably impacted by this.
Cryptocurrencies don't need intermediaries because they are powered by blockchain technology. As a result, transaction costs are effectively reduced, enabling transfers to take place very instantly. Customers only need to see the merchant's public bitcoin wallet address.
Smart speaker payments: Throughout the years, smart speakers and home assistants have grown significantly. Numerous well-known brands, including Amazon, Google, and Apple, introduced their own smart speakers.
Security through artificial intelligence & machine learning: It is not surprising to see hackers target mobile payment customers given the expanding popularity of mobile payments.
According to a NICE Actimize analysis, account takeovers make for 61% of attempted mobile payment fraud assaults. Machine learning (ML) and artificial intelligence (AI) can help with this. Using transaction filtering, financial services can spot odd activity and prevent questionable transactions.
Real-time consumer variables, such as purchasing patterns, biometrics, and geolocation, can be used by AI technology and machine learning capabilities to stop fraudulent transactions. Fraud detection gets more precise with AI and ML.
Social commerce: The majority of today's tech-savvy generation's leisure time is spent scrolling through social media sites like Instagram, Facebook, Twitter, Snapchat, and many others.
Retailers and merchants that have noticed this trend are trying to connect with them on social media and provide them with their products.
Also, they make sure that users may check out via the social media platform rather than being redirected to a page where they must fill out a form.
Moreover, this approach streamlines and expedites payment. Moreover, chatbots expedite checkouts and autofill assistance.
Advantages of Mobile mobile payment
i. Mobile payments are Convenient: This one should be quite clear. Do we take our mobile devices wherever (and I mean anywhere)? While it is possible for someone to accidentally leave their wallet, ID, or pen at home, what about their mobile device? No way!
Mobiles are always within reach, they are evolving into extensions of all daily activities, and companies that offer mobile payment services are making it simple to make purchases with them. Customers' demands are already being met by online shopping and meal delivery, so why would they want to lug around a bulky wallet if mobile payment options are available?
It's all about convenience-no more fumbling for exact cash, carrying around cards, and remembering card numbers.
ii. Security: Customers can make secure payments with mobile payments since they add an added degree of security. This includes 2FA, fingerprint scanning, and biometrics. Also, clients are less likely to have their cash, debit, or credit cards stolen because they don't need to carry them about with them.
In order to protect client data and secure mobile payment transactions, mobile payment service providers are integrating innovative technologies like tokenization and blockchain.
iii. Variable payment modes: Using mobile payments, customers can choose any method of payment with which they are comfortable. Many payment methods are available from mobile payment service providers, including UPI, mobile wallets, debit and credit cards, online banking, and mobile wallets.
Moreover, ACH payments made straight from the bank can be used for mobile payments.
iv. Time-efficiency: The checkout process takes longer when using mobile payments. It takes away the need to seek for cash or stand in line. Consumers may simply place an order, pay with a mobile payment method, and then receive their goods.
v. Pay whenever, wherever: Customers may purchase whenever and however they want thanks to the internet and online retailers. Also, clients can pay for their purchases whenever and wherever they choose with mobile payments. There is no need to go to the shop and risk running out of money or, worse, hunting for more.
vi. Ease of paying: With mobile payments, the initial payment choice can be set as the default (card or bank). Customers can make a payment whenever they are ready to make a purchase because the default payment option is always open.
vii. Management of expenses: We all have a critical responsibility to manage our daily spending. Applications for spending management are widely used. Many companies that offer mobile payment services bundle management or financial tracking functionality inside the application.
These applications can readily incorporate mobile wallets or payment services, which can aid users in keeping track of their spending patterns and of where, when, and how much they spend.
It is simpler to track and manage finances when a default payment method is added and used for all payments because only one card is used for payment.
Tips for Safe Mobile mobile payment:
· Choose reputable payment processors.
· Use built-in security features.
· keep an eye on your credit card account, monitor it.
· use strong password protection, and more.
· For secure mobile payments, store credit card information.
A hopeful future for e-commerce may be seen in the convenience, security, speed, personalisation, and integration that phone-based transactions provide.