Mobile payments are being used by more than two billion people globally, with millions more joining online each year. Mobile wallets are changing the way consumers in the world pay for goods and services. As more and more people rely on their smartphones for their daily tasks, the ability to make “tap and pay” purchases using payment information stored in apps is growing in popularity. However, Apple Pay isn't being used frequently in-store, despite over 50 million users signing up for the service. Testament to developed nations like the US, France, Germany, and others finding it difficult to transition away from physical cash. For software developers and businesses alike, mobile wallets provide a way to streamline a customer's checkout experience and gain insight into their spending and valuable data on their behavior.
Mobile payment transaction volume reached $1.7 billion in 2021, a 27% annual increase, with over two billion people making mobile payments in the same year. In the US, Apple Pay was the most popular payment service, while AliPay and WeChat Pay, the two Chinese mobile payment services, had the most users. Outside of China, Apple Pay has the largest transaction volume of any mobile payment service. The top 10 mobile payment apps have a combined 3.4 billion users worldwide.
According to a Javelin report, fraud losses in the US reached $16 billion in 2017, demonstrating a clear and growing issue that software developers face. It comes as no surprise then that, according to a Pew Research survey, consumers believe that the protections placed on debit and credit cards are more trustworthy than those on mobile payment services. The security issues surrounding mobile payments arise from a variety of factors. Such as the device itself, the network it’s on, or the platform it’s using, even if the mobile payment system itself is secure. Hence the importance of being able to detect anomalies and prevent problems from occurring by enhancing security features with the use of machine learning. This is how developers prevent theft or loss of funds from users’ devices. To learn about other challenges that consumer apps face, read this blog here.
Software developers building mobile wallet platforms strive to maximize convenience while prioritizing security. They also prevent unauthorized access by tokenizing payment card data and requiring biometrics such as fingerprints or face scans. Mobile wallets also facilitate loyalty programs by automatically applying offers and coupons at checkout. This simplifies the entire shopping experience for both customers and retailers. Additionally, payment information is tokenized and stored in mobile wallets, eliminating the need for customers to re-enter card details for each purchase. Compared to overall POS transactions, the growth of contactless payments is still relatively small, but the growth is fast.
In the years ahead, software developers and businesses able to implement secure and personalized mobile wallet solutions while upholding data privacy and security standards are poised to gain a clear competitive advantage. When technology and trust work together to make life more convenient through understanding needs, the future opens wide, offering relationships as the means for progress shared along the way each day.