Benefits and Pitfalls of Mobile Payments

Benefits and Pitfalls of Mobile Payments

Mention a paper check to a Millennial, and you are likely to get blank stares. Before we address the benefits and pitfalls of mobile payments, first we must acknowledge that the idea of writing anything on a slip of paper for a payment is as anathema to them as a rotary phone.  ​

ow, the ubiquitous debit card may also be on the way out as mobile payments via older NFC such as Apple Pay and the new Google Pay, which combines Android Pay and Google Wallet (although the P2P transactions mysteriously are missing) and newer magnetic secure transmission (MST) like Samsung Pay service that uses both NFC / MST and works everywhere to transmit payment information

What about these Benefits and Pitfalls in Mobile Payments?

The more common NFC is the same technology found in Apple Pay and Android Pay, where payment information is securely transmitted between an NFC chip (found in the smartphone) and an NFC reader (usually installed near the point of sale machine) becomes more and more commonplace for transactions. But Samsung Pay with both NFC and MST has several advantages over the other two competing technologies.In a similar trend, shopping for groceries or in drugstores have changed as well. Most places require you to have a “shopper’s card” of sorts to receive the sale prices and values on posted items in the store. This also has changed the face of shopping, mostly in the favor of the retailer than the shopper, but in truth both can benefit from this.  This article will look at each of these mobile payment systems along with the benefits and pitfalls of mobile payments

Imagine leaving the house without your cell phone. It is no doubt you have instinctively just reached to check for it. Forgetting a cell phone today is almost taboo, and for the shopper, this is a true advantage. To pay for almost anything from a movie ticket to gas, wave the phone near the NFC symbol on the transaction terminal; the purchase is made quickly and easily.An added advantage is a paperless form of transaction. More and more people are paying bills on line and eschewing the postal service for monthly bills. Some choose to directly draft everything from mortgages and car payments to child support and utility payments. Receipts and bank information is posted immediately, while technologically-savvy check their banking on line or via an app.Those who cards are afraid of theft will find much of the NFC and MST technologies are highly secure and are easily turned on and off as necessary. Those who fear their information may be compromised will find stopping payments or canceling the card as difficult as a swift tap on an app. All that is needed is a LTE, data or wireless connection to make it happen.Another huge advantage is you can add all the major credit cards as of fall 2016, many bank credit and debit cards, gift cards, and member cards as well. With my Samsung Galaxy S8/9 Edge, I added BJs warehouse, Big Lots, CVS Pharmacy, Best Buy, Lowe’s. Walgreens, and Office Max – just to name a few. I simply put my phone over the credit card terminal and no longer have to pull out or even carry these cards in my wallet. And yes, thank goodness my wallet is now thinner and not causing a curve in my spine.Around the turn of the millennium, stores, particularly grocery chains, shifted from strict advertising sales to a card-based savings system. Signing up for the card was free and necessary to receive the sales benefits. It was slow to receive acceptance, but once the movement caught on, it was quickly accepted as the norm. More and more industries followed suit, and now most all chain store businesses have a card program.The card savings system seems to be troublesome to some, as it may lead to more collected information than some may like. The fear of ‘Big Brother’ has many nervous, although giving personal information is not necessary and there are ways around the majority of the requirements to receive the card and/or benefits.The other benefits and pitfalls of mobile payments deals with these cards often offer special deals and loyalty points for customers who shop regularly. Benefits such as cash savings, points shaved from gasoline costs and free items are only a part of the many choices available. The data the chains receive from the shoppers actually benefits the shopper as chains are more likely to have certain items on sale more frequently, including meats and high cost dairy, i.e. milk.   Millennials and Generations X and Y are certainly comfortable with NFC and modern technologies, but as the Baby Boomer Generation grows older and more and more removed from modern technological advances, convincing these generations to trust NFC is difficult. The fear of card readers or identity thieves taking personal information by simply walking near someone is virtually impossible. Convincing them, however, of this fact may prove to be a serious uphill fight.The card program too has its flaws. Many are reluctant to sign up but often feel forced. This can create resentment of the business, even in the face of good benefits and values. More still do not like the idea of filling a wallet with additional cards, particularly for cards used rarely.

More on the Benefits and Pitfalls of Mobile Payments

Note, however, the disadvantages of both are minor and can easily be overcome through simple education. For businesses to move to paperless, checks and account balance information, and card loyalty programs, each must aggressively market to those groups who are most reluctant to make these changes. Commercials and videos explaining the benefits while simultaneously downplaying the potential downfalls is vital to success. Fear of identity theft may be slightly more difficult to win people over but promises of insurance and security are often enough to assuage fears. Your thoughts on this issue are appreciated – what is your opinion on the benefits and pitfalls of mobile payments?

The Benefits and Pitfalls of Mobile Payments NFC and MST

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Summary
Benefits and Pitfalls of Mobile Payments
Article Name
Benefits and Pitfalls of Mobile Payments
Description
Millennials and Generations X and Y are certainly comfortable with NFC and modern technologies, but as the Baby Boomer Generation grows older and more and more removed from modern technological advances, convincing these generations to trust NFC is difficult.
Author

Kelley Reinhardt

Partner | Executive Search Consultant with 20+ years recruiting senior executives and functional leaders in cyber security, mobile digital media and network operators, industrial manufacturing, Internet of Things, robotics, and industrial power systems.

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