Unconventional channels driving mobile payments adoption

Unconventional channels driving mobile payments adoption

By Beth Kotz, contributing writer,

There are nearly 5 billion people worldwide using mobile phones. In the U.S., about 40 percent of all mobile device users have made one or more mobile payments in the last year. With both of these numbers projected to continue growing, it's clear that mobile payments will be a major part of the way we pay and conduct business well into the future.

Still, adoption hasn't come as quickly as expected. One potential solution to accelerating this process may lie in unconventional channels such as virtual reality and wearable tech, but can these technologies really drive more people toward mobile payments?

Growing pains

The mobile wallet is a quick, easy and convenient way to make payments, but it hasn't been as readily embraced as many companies expected.

Surveys reveal that many people have been turned off by technical glitches, limited availability and security concerns, and the technology has struggled to generate the kind of sustained momentum needed to gain a foothold and change consumers' existing payment habits.

Mobile payment technology is still in its relative infancy, but growing pains can be costly when it comes to new technologies seeking wider adoption.

A new way forward

All is not lost, however, as the convenience and ease of use offered by mobile wallets still holds strong appeal in today's fast-paced world.

To bring these advantages to a wider audience, many groups are increasingly thinking outside the box to identify new venues for mobile payments. Even if contactless payment remains a relatively underutilized payment method in the "real world," the ever-expanding digital frontier offers a vast array of new possibilities. Among the most promising of these channels are virtual reality, wearable technologies and in-vehicle payment systems.

Going Virtual

In the not-too-distant future, a consumer who wants to purchase an item may be able to browse a store, check out items of interest and quickly pay for whatever they need — all in virtual reality.

More than 170 million people are expected to own virtual reality products by 2018, and persuading those people to shop in the virtual world using mobile payments could pay off handsomely. In fact, online marketplace Alibaba has already begun work on a system that would allow VR users to buy products simply by nodding their heads.

The ability to pay quickly and digitally is a natural extension of the virtual reality space, and as VR technology grows in popularity, so too will mobile payments.

Wearing your wallet

As technology continues to advance, more and more everyday objects are becoming "smart."

Contactless payment technology has been integrated into everything from jackets to wristbands to key fobs, and such wearable tech will only expand in the years to come.

Many credit card providers, including giants such as American Express and MasterCard, are facilitating this transition by providing support for Apple Pay and other mobile payment platforms, and brick-and-mortar establishments are slowly integrating contactless payments as well. Wearable devices may not be ready to supplant the wallet quite yet, but they will undoubtedly play a large role in bringing mobile payments to the masses.

Driving mobile payments

This slow-motion shift in the way people pay is not limited to mobile devices and wearable tech — it can also be found in vehicles. Credit card companies and vehicle manufacturers — MasterCard and General Motors, Visa and Honda and others — are increasingly pairing together to provide in-vehicle mobile payment solutions, particularly when it comes to paying at the pump.

By employing Bluetooth connectivity and arrays of high-tech beacons, these partnerships are seeking to change the way drivers pay for fuel and bring greater speed and convenience to the pump. Virtual assistants like Amazon's Alexa are also joining the effort, lending a more human touch to the process of paying for gas and buying other items from the comfort of the driver's seat.

As with any new technology that seeks to topple the established way of doing things, mobile wallets and contactless payment platforms have been faced with plenty of hurdles. The technology is still growing and maturing, and issues such as limited adoption, technical hiccups and security concerns have limited its momentum.

Nonetheless, many exciting opportunities are emerging to draw in new consumers. In an ever more mobile world, mobile payments are here to stay.

Beth Kotz is a contributing writer to She specializes in covering financial advice for female entrepreneurs, college students and recent graduates. She earned a BA in Communications and Media from DePaul University in Chicago, where she continues to live and work.

Topics: Contactless / NFC, HCE, In-App Payments, Mobile/Digital Wallet, POS, Trends / Statistics

Companies: Visa, MasterCard

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