According to a recent IDC Financial Insights report, global mobile payments will see a compound annual growth rate of more than 43 percent in the next five years. The total value of payments over mobile networks worldwide is expected to reach nearly US$4 trillion in 2020, while other forms of mobile payments including those made with near field communication (NFC) such as Apple Pay would experience significant growth too.
We spoke to experts to find out how mobile payments are impacting the Asia Pacific region (APAC) and future of such payments.
According to MasterCard's research, consumers in APAC hold a favourable view of mobile payments. In 2014, 90 percent of the conversations on social media regarding mobile payments were found to have a positive sentiment, with convenience (96 percent) being the most frequently discussed positive topic. "As consumers become used to executing various daily activities on their phones, they now demand the convenience of making payments through their phones," said Mung Ki Woo, Group Executive of mobile at MasterCard.
Besides providing the convenience of not needing to carry around cash or plastic cards, mobile payments are expected to be easy to use and hassle free. "Mobile payments should enable consumers to pay without having to re-enter their login and payment information after a one-time registration," said Aunkur Arya, General Manager for mobile at Braintree. One such example is the Apple Pay, which allows users to link their credit card to their Apple ID by taking a photo of the card on their iPhone. Once the card has been verified and granted Apple Pay access, users will only need to hold their iPhone up to a NFC payment terminal near the cash register and use Touch ID to complete their payment.
However, Andrew Parker, Sales Director of digital channels at Fiserv Asia Pacific, believes that it takes more than just providing convenience to encourage consumers to embrace mobile payments. "For mobile payments to gain mass market adoption, merchants need to provide reward incentives exclusive to consumers opting to pay via their phones. For instance, merchants could offer mobile coupons or award loyalty points to reinforce customers' loyalty to using mobile devices since customers in APAC are usually attracted to such efforts."
Security and privacy concerns surrounding mobile payments also need to be addressed to help entice consumers to take up mobile payments. "With new payment modes, come new processes, which opens up new security vulnerabilities. Retailers thus need to find ways - such as implementing fraud prevention and enhanced security tools - to assure consumers that their information is in safe hands, even if they were to lose their mobile devices," said John Knuff, Vice President and Global Head of Ecosystems, Equinix.
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