10 Jul 2024
  

Mobile Payment Trends: The Rise Of Contactless Transactions 

Shaun Bell

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Mobile Payment Trends: The Rise Of Contactless Transactions 

The constantly changing realm of technology gives birth to new inventions every day to make things convenient for target users and increase the scope of app development companies to earn profit by developing apps according to individual preferences.  

In the digital era, where everything is defined by rapid technological advancements, the landscape of financial technology has undergone a monumental transformation. The current market mobile payment trends have emerged as a significant driving force reshaping how a business operates with worldwide financial transactions.  

With changing times, the user’s expectations regarding convenience and speed have led to the development of mobile payment apps, which have taken the lead in the race for payment technology. The rapid rise of contactless transactions gave the required global push towards digitalising traditional transaction methods individuals used. It is pivotal to partner with a reputable app development company to build the mobile payment app of your dreams. 

Growth Of Mobile Payment Apps –  

After the pandemic, the rise in the development of payment apps increased significantly, with people embracing the new transaction methods due to the growing adoption of smartphones, the need for contactless payments during the pandemic and the expansion of e-commerce.  

Over time, the world of mobile payment systems has evolved considerably from straightforward SMS-based systems to sophisticated platforms supporting a wide array of transactions, with Applepay, Paypal, and Splitwise being some of the more popular mobile payment apps. 

You would be surprised to know the robust growth that mobile payment apps have witnessed in previous years, with more than 80% of Australians leaning towards using cashless payment methods for transactions. The pandemic proved to be a boon for mobile payment app development companies, as it increased the demand for contactless payments to prevent the spread of the virus among people.  

Growth Of Payment Mobile Apps After The Pandemic–  

Over the previous years, payment mobile apps have made a place in the market with the brilliant technology and security provided to their users, making it effortless for them to make transactions after using different services. 

After the COVID-19 pandemic, more than 90% of individuals shifted towards using payment apps to make transactions to avoid getting sick from the virus, with the younger group of individuals preferring modern methods of making transactions. 

Even though individuals were using payment apps before the pandemic, they gained robust growth after the pandemic started, as it helped them stay safe without compromising on any of their daily needs. It is anticipated that the deployment of 5G technology and the incorporation of Internet of Things devices will accelerate the use of mobile payments. 

What Is A Mobile Payment App? 

Before we discuss mobile payment apps, let’s understand what mobile payment is and its needs. In simple terms, mobile payment can be described as making financial transactions through one’s smartphone or tablet from anywhere to anyone without any issues.  

One of the best aspects of mobile payment is that it enables individuals to make direct payments to their peers or merchants from whom they are availing a service. Imagine a world where you won’t need to withdraw cash ever again or use your credit cards to make payments for the services you avail.  

Do you still make transactions through traditional methods? Well, rest assured, gone are the days you needed to rummage through your wallet for cash or fumble with credit cards at checkout counters. The changing technology has led to the rise of mobile payment apps that have made it significantly simple for individuals to make transactions from their homes without withdrawing cash when needed. 

Mobile payment apps, also known as mobile money, are payment processing services operated under the financial guidelines and regulations performed via mobile phones. Mobile payment apps have enabled individuals to make direct payments to entities without going through the traditional transactional routes using cash, cheques or cards, thus making the entire process convenient for individuals. 

Japan was the first country to adopt the latest mobile payment technologies to develop brilliant mobile payment apps for the sake of the speed and convenience of the users, with the first patent titled “Mobile Payment System” filed in 2000.   

Types Of Mobile Payment Apps– 

The era of modern technology has led to the rise of mobile payment apps due to their speed and the convenience they provide to users by saving them a trip to the bank to withdraw cash or use cheques. Haven’t mobile payment apps made it convenient for people to make transactions any time they want from anywhere to any part of the globe without difficulty?  

There is an array of different mobile payment apps catering to the unique needs of individuals, and we will discuss a few of the more popular ones today in this blog.  

1. Mobile Wallets– 

I am sure most of you must have used mobile wallets at one point in time to make transactions, especially during the peak of COVID-19, when most entities refused to accept cash payments for necessary goods. So, what exactly is a mobile wallet? Mobile wallets are a virtual wallet that functions similarly to ordinary wallets allowing users to manage and store their payment information securely on their devices. 

Mobile wallets like Paypal and ApplePay enable individuals to make payments and transfer funds in-store or between peers, thus providing convenience and versatility to users by allowing them to make contactless payments within a single app.  

The introduction of virtual wallets in mobile phones marked a milestone in the evolution of mobile app payment by allowing individuals to make contactless payments by tapping their devices at compatible point-of-sale terminals. Since its establishment, mobile payment apps have evolved by adopting the latest technologies to enhance security and convenience.  

2. NFC Payments  

Now, I know most of you haven’t heard about NFC payments before, leading you to wonder what payment method it is and how it is better than traditional transactional methods. For the unaware souls, NFC is a short-range wireless technology that enables mobile devices to exchange data between themselves when they are nearby, typically less than 10 centimetres. 

The NFC payment method involves utilising compatible devices like smartphones or cards with NFC chips to enable secure transactions between peers and entities making a sale by tapping your device on the payment terminal to complete the transaction.  

Now, you might wonder what protects our devices against foreign threats and hackers. The sensitive data is encrypted and tokenised as a security measure to help protect the data stored in an individual’s device from foreign threats while reducing the need for physical payment methods. 

3. Peer-2-Peer Payment Apps 

If someone has borrowed money from you, you can use peer-to-peer payment apps like Beem It to ask them to return the borrowed amount directly to you without visiting you or the bank to withdraw money. 

A peer-to-peer mobile payment app is an app that facilitates seamless and convenient money transactions and transfers by allowing users to send and get money straight from their devices, thus eliminating the need for conventional payment methods like cash or cards. The best part about these apps is that they allow users to split bills with friends and make payments accordingly without the hassle of physically calculating the amount each individual owes. 

4. SMS Payments  

The oldest form of contactless payment was the SMS Payment method, which involved hassle-free and secure transactions through text messages from your registered mobile payment provider linked to your bank account or card. It enabled users to text the payment link to the person responsible for paying the amount, with the cost of sending the texts calculated at the month’s end and included in the phone bill. 

5. Mobile Point-Of-Sale 

Mobile point-of-sale is an innovative technology that has evolved the world of business transactions by allowing your devices to turn into a portable cash register, enabling you to accept payments from your customers anytime, anywhere.  

If you are a business that is continuously moving, then this type of payment app is a match made in heaven for you due to its flexibility in accepting and sending payments to your customers. Businesses might use mobile devices like tablets and smartphones to manage their business inventory, perform transactions and take payments without any issues thanks to mobile point-of-sale technology. 

6. Buy Now Pay Later 

Wouldn’t it be great to buy products you want today and pay later in instalments without paying extra? This is no longer a dream for several individuals due to the invention of buy now pay later apps that allow individuals to buy a good today and pay for it later in interest-free instalments to make it easy on their pocket. Apps like Afterpay and Zip Pay are a boon to lower middle-class individuals, as they allow them to buy stuff at a reasonable price due to the total amount being divided into instalments.  

7. Cryptocurrency Payment App 

Well, for the ones who don’t know anything about cryptocurrency, it is an alternate form of digital payment overseen by a decentralised system employing encryption to maintain records and verify transactions rather than a centralised system. The cryptocurrency payment system allows individuals to make payments using cryptocurrencies that have gained popularity in recent years due to low transaction fees applied to individuals. 

8. E-commerce Payment App 

Do you love to buy stuff online? If yes, then apps like Shopify and PayPal are the perfect match for you as they allow users to make seamless transactions between buyers and sellers on e-commerce platforms without issues.  

These apps are designed, especially to shop online through a secure payment option with additional features like order tracking, expected delivery date, and managing orders. The best aspect of these apps is that they feature multiple payment gateways, including credit and debit cards, bank transfers, and digital wallets, enabling users to choose any payment method they desire.  

Benefits Of Mobile Payment Apps – 

This is the kind of information you need to know about, how these mobile payment apps have changed the mobile finance sector for good by making transactions convenient and fast. The current population has more than 90% of people using modern means of payment thereby creating an excellent market opportunity for companies developing mobile applications.  

1. Convenience – 

Mobile payment apps are popular because they allow users to pay directly into entities with just a tap hence minimizing the time spent at the point of sale. It is a very convenient app that lets people make transactions with anyone at any time from anywhere without going to the bank or using checks as long as they have their mobile phones and bank accounts. 

In addition to user convenience, speed is what makes transactions happen quickly between those involved. These mobile payment systems come along with a reward system which helps individuals win points and get some percentage off or coupons for the next purchase. 

2. Security– 

Initially, there was doubt that these applications would be secure enough to facilitate transactions but this concern diminished fairly quickly. Encryption, biometric authentication and encoding are some of the security measures applied by such applications ensuring that transactions are done safely hence increasing the user’s safety level from physical cash. 

The invention of mobile payment apps has reduced the risk of theft that individuals had while carrying physical cash, as one no longer needs to have massive amounts of money on them to use a service. Apart from this, mobile payment apps have made it easy for users to identify unapproved activities on their banks as the users get informed of each transaction made the moment it happens via notifications.  

3. Contactless Payments- 

Another beneficial part of mobile payment apps is contactless transactions, meaning one can make payments without having to come in physical contact with individuals. It is a feature that comes in handy during health crises like the COVID-19 pandemic when it became essential to keep physical touch with unknown individuals to a minimum. The contactless payment feature has allowed individuals to make quick, secure payments on the go to save time without waiting one’s turn. 

4. Elimination Of Physical Wallet   

With the invention of mobile payment apps, you no longer need to carry your wallet everywhere, thus making travelling to different destinations hassle-free with fewer things to take along. Everything from your bank details to transaction history is saved securely in these apps, ensuring you no longer need to keep physical copies of every transaction you have made.  

5. Peer-to-Peer Payment  

If you regularly go out with your friends and share a dinner with the understanding that you will split the total dinner cost between you, then you need to get on with peer-to-peer payment apps, as they allow you to split the bill and send the money to the friend who paid the bill. Did you know some mobile payment apps also have features like WhatsApp, which allows users to text their friends with the payment?  

6. Technological Integration  

The nice thing about mobile payment apps, as you may probably already know, is that they’re easy to integrate with the newest wearable technology, such as smartwatches, which makes it even easier for people to make payments while on the go. People can make payments faster and more effectively because of the combination of mobile payments with cutting-edge technology like 5G connection and the Internet of Things [IoT].  

Australia’s Mobile Payment Revolution: Trends Shaping the Future 

Over the years, mobile payment trends in Australia have taken a turn for the better by continuously evolving through technological developments, changing the behaviour of users and the ongoing shift towards a cashless society with more people leaning towards mobile payment apps.  

Australians’ transaction handling practices have changed significantly in the last couple of years, with this shift witnessed in the Reserve Bank’s latest Consumer Payment Survey. With the help of external variables like the global pandemic, shifting consumer preferences, and technological improvements, their extensive poll offers a clear snapshot of how payment behaviours have changed over time.  

1. Bridging The Financial Gap– 

Bridging the financial inclusion gap is one of the most pivotal effects of mobile payment trends, particularly in emerging nations with limited traditional banking infrastructures. 

Mobile payment apps are a lifeline to millions of individuals living in developing countries by providing them access to essential financial services. Mobile app payment technologies have transcended the limitations of borders, allowing individuals to make payments and foster international commerce relations. 

2. Embracing The Cashless Trend Over Cash 

After the pandemic, people have adapted to using mobile payment apps to make transactions for their daily needs, thus making contactless payment a norm across the globe, with the majority of individuals preferring this new technology for the convenience and speed it provides.  

This shift from cash to cashless payments is a defining feature of the Australian economy, with a mere 13% of the population making transactions in cash over digital payments. This shift in trend is a direct result of the global health crisis that occurred in 2020, which prompted a surge in contactless remote transactions due to the social distancing norm. 

3. Growth Of Digital Wallets   

You have to be conscious of the convenience that comes with using a mobile payment app during the pandemic to avoid getting infected by the virus. Digital wallet services provide a safe and easy way for users to save their credit card credentials and transaction history on their devices, which they can access whenever they want to make a purchase using mobile payment apps like Apple Pay. Users of these applications can earn reward points for every purchase through integrated loyalty programmes, which they can redeem later.  

4. Rise Of Card Payments 

Debit and credit cards have been the king of convenience since they were introduced to people, but they boomed following the health crisis that occurred in 2022 due to how easy they were to use. Statistically, the card payments done in 2022 alone account for three-quarters of all the transactions done in the year, making them a staple at checkouts, offering a quicker, tap-and-go solution that aligns with the fast-paced lifestyle of consumers. The best part about these cards is that you no longer need to enter your PIN at checkout every time you want to purchase something, as now you can tap the card on the terminal, and the transaction is done almost instantly.  

5. Revolution Of QR Code 

QR Code is a notable newcomer in payment technology that offers seamless transactions that can be done by linking directly to a mobile wallet or bank account, thus reducing the need to carry physical cards. Within a few years, QR Codes have gained immense popularity among users due to the convenience they provide to users by offering them a quick and secure medium to make transactions. 

6. Unlocking Potential with PayID 

PayID is an upcoming trend expected to gain traction as it has changed the way bank transfers occur by simplifying the process to an identifier like a mobile number or email. It has sped up the transaction process by enhancing security measures by confirming the recipient’s details before the completion of a transaction to avoid unapproved transactions. Just think about the brilliant technology that has enabled you to no longer fumble for cash or exchange bank details to send money to anyone. 

7. Online Shopping: From Novelty to Necessity 

During the pandemic, online shopping peaked, with more people leaning towards making purchases from the safety of their homes, leading to a new record of 18% of retail payments done online getting made. This growth points perfectly towards the ongoing shift of users towards cashless modes of payment, as more Australians are embracing the convenience provided through e-commerce. 

8. Alternate Payment Methods- 

Innovations in payment options available to Australians keep their spending pattern varied, leading to the rise of alternate payment options like Buy Now Pay Later and PayPal for making transactions due to the security they provide the users. Even though these are relatively new apps, they have gained acceptance from people, especially the younger generation. 

9. Adoption Of Blockchain Technology 

Blockchain, a brilliant technology often used to enhance the security procedure of apps, is being explored by app developers for its potential to improve the efficiency of mobile payment apps. Even though the tests are in the initial stages, the brilliant technology offers a decentralized ledger system capable of streamlining cross-border transactions. 

10. User Demand For Seamless Experiences 

With time, users’ expectations increased for a seamless app experience, enabling them to make frictionless transactions. This has led to a shift in the focus of app development companies towards developing a user-friendly interface with quick processing time to meet these user demands. A reputable app development company focuses on creating a holistic digital payment experience for users.  

Key Technologies Used In Mobile Payment Apps- 

Over time, mobile payments have changed the way Australians conduct financial transactions due to the convenience and security these apps provide to the users. The country is increasingly becoming a cashless society, with the use of cash for transactions declining steadily to only 13% in 2022, down from 70% in 2007.  

The shift towards a cashless society accelerated due to the pandemic, which encouraged more people to start using contactless and online payment methods due to hygiene concerns. There is a set of technology that rules and is required in developing a mobile payment app. 

1. Near Field Communication– 

Near Field Communication stands at the forefront of the mobile payment ecosystem, allowing for a contactless, secure transaction between mobile devices, typically within proximity. It is one of the technologies that is embedded in payment terminals and smartphones, allowing them to make transactions by tapping the device near a compatible point-of-sale terminal. The technology has gained traction over time due to its convenience, speed, and enhanced security features, making it a priced possession for consumers and small businesses. It has also reduced the risk of interception as this technology works only in proximity, leading to its evolution, driven by the pursuit of consumer choice and business. 

2. Tokenization 

Security is a crucial part of developing mobile payment apps, and tokenization is a technology that is a massive part of the process as it protects sensitive user data by assigning a unique identifier to pivotal details like card details. This technology allows individuals to make payments without exposing any information about individuals, making it a prime choice for reputable app development companies.  

3. Mobile Wallets 

With the ability to securely keep card information on their devices and make payments whenever they choose, mobile wallets, also known as digital wallets, are an improved feature that has become a mainstay of app development in Australia. In addition to keeping the necessary information, these technologies frequently facilitate digital assets and loyalty programmes, which makes them adaptable and a well-liked option for people trying to simplify their money management. 

4. Biometric Authentication 

Biometric authentication is another pivotal technology that is a part of app development as it makes the transactional process secure and speedy. This technology requires facial recognition and fingerprint scanning, therefore offering a higher security level compared to traditional passwords and PINs due to them being unique to every individual and difficult to replicate. The modern smartphone comes equipped with biometric sensors, enabling consumers to authenticate transactions securely by making it essential for individuals to do face recognition, therefore adding an extra layer of security against unauthorized access. 

5. Blockchain Technology  

Blockchain technology has the potential to further change the app development process by providing a decentralized and transparent ledger system that will enhance the security of every financial transaction. A reputable mobile app development company explores the integration and use of blockchain technology before starting the app development process, as it is beneficial for cross-border transactions.   

6. 5 G Connectivity  

The impact of 5 G connectivity has to be a massive revolution in the app development industry due to faster speed, increased network capacity, and lower latency provided by the emerging technology. After the rollout of 5 G connectivity, mobile payment app users can expect faster transaction processing time and a seamless experience.  

7. Artificial Intelligence And Machine Learning 

Artificial intelligence (AI) is a rapidly developing technology that is used to enhance the security and effectiveness of mobile payment apps in Australia. AI can analyse large volumes of routine transactions to find trends and instantly spot suspicious activity. A more user-friendly and secure mobile payment ecosystem is facilitated by machine learning technology and chatbots powered by artificial intelligence are growing in popularity due to their capacity to offer consumers assistance and  recommendations. 

   

8. Wearable Payment Devices – 

Wearable payment devices like fitness trackers and smartwatches are equipped with NFC technology that allows users to make hassle-free payments by tapping the device on a payment terminal without entering any code or PIN. These devices provide a convenient alternative for users preferring to carry minimal things while travelling. 

Conclusion 

Payment mobile app development is more profitable than ever for online businesses now, with more people leaning towards adopting cashless forms of payment over traditional methods.  

The advancements in technologies like blockchain technology provide a secure framework for transactions, 5 G with its speed and lower latency, enables smoother transactions and artificial intelligence, with its ability to detect fraudulent behaviour, continues to play a pivotal role in the evolution of contactless payments.  

Over time, youngsters from around the globe have started preferring cashless payment methods to avoid the hassle of continuously withdrawing money or using cheques to make purchases.  

At 7 Pillars, an app development company, our team excel in revolutionizing, cutting-edge technology to evolve the world of mobile app development. Our technocrats are experts in creating reliable software solutions for our client’s mobile payment apps by understanding their vision and goals.  

Our team at 7 Pillars, a reputable mobile app development company in Australia, believes in taking a client-focused approach while designing solutions for mobile payment apps to ensure the latest technologies get incorporated into it while ensuring the end product aligns with clients’ vision.  

Crafting a mobile app can become a lucrative business endeavour for small businesses with  an anticipated market value worth billions of dollars and an expanding user base. If you are an industrialist looking to develop a mobile payment app to boost your business, then look no further and contact our team at 7 Pillars, a leading app development company today.  

Over the years, mobile app development companies have taken the lead in creating travel apps for individuals to use, thus expanding the overall marketplace for them. The creation of mobile payment apps for personal and professional use has been spearheaded by mobile app development companies over the years, opening up a new market for them.    

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