Last week we discussed how COVID-19 is impacting payments in the vending industry. Today we will look at how the global pandemic has affected the mobile payments industry.
Mobile payments are a growing trend that multiple industries utilize for convenience and faster checkouts. However, the arrival of the novel coronavirus, or COVID-19, has created a greater demand for mobile payment solutions to increase the speed, safety, and security of business transactions. Since consumers have been forced to drastically change their purchasing habits, businesses have had to respond with newer, safer technology to maintain customer safety. Now, as businesses begin to open up again, mobile solutions are being deployed and mobile wallets are being accepted because businesses want to extend extra protections to themselves as well as their customers for safety purposes.
Mobile solutions were intensely popular upon release. However, they experienced delays in countries like the U.S. when businesses began to drag their feet and delay new technology investments. This resulted in a gap between the availability in developing technologies versus the actual support and deployment of said technologies in real world settings. However, mobile solutions and mobile wallets have now begun to rise again in the face of this pandemic.
There are two kinds of mobile solutions: solutions that attach to phones, and solutions that accept contactless payments via mobile wallets. Both have strong ties to retail because of their ability to minimize lines while speeding up and improving a customer’s in-store purchasing experiences. As COVID-19’s spread has become more prevalent and businesses have limited the amount of customers who can enter their stores, line busting—completing a sales transactions with a mobile solution so customers don’t need to stand in line—is being used to reduce wait times and quicken transactions. As a result, the now normal line of customers waiting outside of a business has seen a decrease in length and in wait time.
The arrival of new technology always brings new critics along with it. Many times, when new payment methods and technologies are developed, consumers ask the same question: “Is my data going to be safe?” Mobile payments are as secure as any other payment method as long as they have current security certifications and safety measures in place.
Misconceptions around the security of mobile payments are another reason why the segment’s growth has been hampered but COVID-19 has brought in a changed perception and we are now seeing more and more consumers reaching for their smartphone for faster checkouts. However, there was never anything to fear because mobile wallets tend to use digital tokenization, or replacing sensitive cardholder data with a virtual account number, to ensure users have safe transactions. Each mobile wallet utilizes tokenization differently, but consumer information is never plainly kept in a mobile wallet; all sensitive data is at least partially encrypted.
Mobile solutions that allow the acceptance of payments on mobile devices are also secure as well. While many are not physically connected to countertop POS systems, they still use the same encryption methods that other POS systems do. Cards that are processed through mobile solutions can only be decrypted by acquiring banks and are safe in merchant environments. As a result, it is as impossible to extract data from mobile solutions as it is from any other solution.
Apple, Samsung, and Google all offer mobile wallets, or encrypted card information stored on a mobile device, for contactless, mobile transactions. Even Facebook is creating Facebook Pay to compete with the other payment applications. In the face of COVID-19, many mobile wallet sceptics have turned to the new technology to prevent infection from physically inserting or swiping their payment cards with potentially contaminated payment devices. Mobile wallet payments allow consumers to make contactless payments without touching any payment cards or payment terminals, making them the most hygienic option for transactions. The sudden arrival of COVID-19 has caused a huge shift in consumer’s daily lives and has resulted in them being forced to be comfortable in engaging with new mobile and contactless technologies to keep themselves safe.
The mobile industry has made huge growth strides in the face of a deflating economy, and as businesses continue to open and navigate payments during COVID-19, mobile payments are sure to develop and spread across all industries even farther.
To learn more about ID TECH’s mobile solutions, click here.
ID TECH is a leading global payment peripheral provider with expertise in magnetic stripe, EMV contact, EMV contactless, and OEM customization solutions. We have a strong foundation and continued success rooted in card readers and are always expanding our product offering to provide innovative solutions for the ever-evolving payments industries. Payment Security is an integral part of our product offering, and ID TECH as a company prides itself at being at the forefront of payment security in our design, development, manufacturing, and sales processes.
To learn more about ID TECH and our dedication to achieving payment security, please visit our about page.