5 Payment Mechanisms Set to Go Mainstream in the Next 2 Years
In the last couple of years many new payment mechanisms have come into existence. Even though traditional payment services like credit cards and PayPal still dominate the market — both offline and online — newer payment mechanisms like Apple Pay and Android Pay are becoming increasingly popular.
With leading brands like Starbucks, Subway, Staples and others embracing these novel payment methods, it's only a matter of time before you can walk into the corner store, scan your fingerprint, and walk out with a loaf of bread. Here's a look at five payment mechanisms to watch out for:
1. Mobile wallets: In case you haven't used it yourself, you've likely not missed those logos of PayPal gracing the websites of nearly every e-commerce site. PayPal is one of the oldest and most successful digital wallets in existence today. Just as a digital wallet like PayPal holds money in an online account to be used for making payments across a variety of platforms, mobile wallets too perform an identical function housed inside a smartphone.
Apple Pay is Apple's foray into the mobile wallet space that Google first entered in 2011. In the months since its launch, Apple Pay has become the fastest-growing mobile payment mechanism ever. Google's recent deal with Softcard that offers Android phones being shipped from T-Mobile, Verizon and AT&T pre-installed with the Google Wallet is sure to spur further growth of mobile wallets in the months ahead.
The reasons for the popularity of mobile wallets are manifold. With the leading smartphone makers now offering mobile payments using near-field communications (NFC) technology, point-of-sale (POS) systems at retail establishments as well checkout forms online have kept pace with the changes. Paying with a mobile wallet means the customer doesn't need to share their personal data or bank account details to complete a transaction. The fact that the payment can only be made after a second level of authentication (e.g., with a PIN number or a fingerprint scan) makes their use even more secure from hackers.