With increasing speed and accessibility becoming the new trends in digitalization, the Fintech industry is getting its share from the dramatic changes coming to our day-to-day financial activities. One of the most significant impacts of these new trends on the finance world is indeed contactless technology. Be it with NFC, QR code or any other authentication technology, the ability to make contactless payments offers whole new possibilities for both business owners and consumers. Here at Tmob, we aim to bring growth and success to businesses from various branches with our mobile financial solutions. Since contactless payment technologies began taking a large place in daily life, we decided to share our insights on the present and future of contactless technologies.
Nowadays, nearly everyone has a card in their wallets that can make contactless payments. The contactless or smart card technology lets users conduct their payments just by tapping their cards to the payment terminals. Contactless smart cards work by communicating with card readers via short-range radio frequencies and offer high levels of security to protect customers’ financial and identity information. But it’s not only contactless cards that use this technology to improve the quality of the service they’re providing. In fact, the inclusion of mobile devices in this field as payment and transaction methods makes the real difference since they immediately multiply the use cases and increase the accessibility of this technology.
Since contactless technology is going hand-in-hand with the current trends of digitalization which is increased speed, security and accessibility, it is more likely that contactless payment methods will surpass the use of cash in the foreseeable future. The numbers also look promising; in 2021, $2.5 billion worth of payments have been made with contactless cards. By 2023, the projected amount of mobile contactless payments is expected to reach $49 billion. The total amount of contactless payment transaction values has increased 45% between 2020 and 2021, and 75% of the global domestic money transfer transaction values are comprised by contactless payments in 2021. So, it’s not that hard to see that contactless payment methods are going to negate the need for cash one way or another, and you need to get ready for a drastic change as a business.
At the beginning of 2020, the whole world was shaken by a global disaster that is the coronavirus pandemic. And since then, many aspects of our lives are being shaped by the fact that crowded spaces and interactions with people can be a health threat. So, governments and businesses are taking necessary measures such as social distancing rules that require individuals to pay attention to people around them. And contactless payment methods offer the best way of making payments while staying within the boundaries of social distancing measures.
The contactless payment technology is usually seen as a way of making checkouts in supermarkets, restaurants or cafés. But payments are only the tip of the iceberg when it comes to contactless mobile money technologies. Contactless technologies also offer revolutionary ways to conduct P2P transactions as easy as tapping two devices to each other and transferring money in mere seconds.
The frequent use of NFC supported smart devices allows for a handy feature; card emulation. Thanks to NFC technology, your contactless payment cards can now be linked with your smartphone so that you can use your smartphone as your card. This adds to the practicality of contactless payment methods and speeds up the process of leaving the wallets in history as a whole.
Another frequently used contactless payment method, QR codes, works the same as the barcodes in supermarkets. The visual authentication system allows customers to scan the QR codes in payment terminals to conduct their transactions quickly and securely.
Like contactless payments, QR payments are also attracting tons of users thanks to their ease of use and speed. And they contribute to the unrelenting uprising of mobile payment systems as the numbers show; the number of people using QR payments in the US is expected to rise by 240% between 2020 and 2025. QR payments are expected to reach 2.2 billion users and $2.7 trillion payment transaction value in total by the year 2025.
QR payments also make way to further use of contactless payment options outside the stores. Thanks to the financial solutions of Tmob, Istanbul’s transportation card İstanbulkart is now supported by the QR technology that allows users to make their transportation payments with their smart devices without the need for a physical card.
NFC in mobile devices is not only good for connecting with payment terminals or making transactions with other NFC-enabled devices. Thanks to the radio frequency-based logic of NFC technology, NFC supported smartphones can quickly transfer data with passive devices such as product packages, tickets, or brochures. This feature can be helpful in ID authentication for event or transportation tickets or getting information like the manufacturing process or expiration date about a particular product by tapping your smartphone to an advertisement brochure or package.
Smartphones are not the only devices that can support data transfer technologies like NFC and QR codes. Besides smartphones, wearable devices like smartwatches, bracelets or rings with NFC support can offer a convenient and personalized option for making contactless payments in the near future. And as this ability also shows, wallets and cash are definitely going to leave their place to mobile finance solutions in the today and the future of mobile payments.
Microsoft, Starbucks, Tesla, and Amazon… These are some of the brands with the most prominent brand awareness and visibility globally. And they are all accepting cryptocurrencies as a way of payment, directly or indirectly. In a future where the biggest companies in the world are giving their customers the ability to pay with crypto, local cafes or stores accepting Bitcoin as payment will not be a rare sight for sure. Businesses need to react to compete, and they need to react fast. Since cryptocurrencies are the furthest form of payment from cash, contactless payment methods like QR codes and NFC will inevitably have wide usage in cryptocurrency transactions.
Thanks to its encryption and verification processes to prevent cloning, contactless technology is more secure than traditional magnetic stripe technology. Indeed, every transaction made using contactless payment technology generates a dynamic code that a payment terminal must validate before being authorized. This makes it very difficult for criminals to replicate cards and steal from unsuspecting victims.
Contactless payments are much faster than traditional payments, as they require only the tap of a payment terminal. In this way, facilitating contactless payments is a great way to put customer needs at the forefront of your business strategy.
As it can be seen, contactless technology provides not only users with one of the safest and easiest ways to pay for goods and services, but it also creates a whole new world of opportunities for the future of cities, businesses, and customers. With its popularity only set to increase, companies must make the most of this trend. Get in touch with us now and find out how you could benefit by using the revolutionary MFS solutions of Tmob.
Tmob | Thinks Mobility is a global technology powerhouse, specialized in digitalization and integration solutions, bringing growth and success to businesses and partners with its innovative SaaS, PaaS, and premium solutions since 2009 with Tmob Turkiye (TR) and Tmob United Kingdom (UK) headquarters.
Sources: 1- https://www.juniperresearch.com/infographics/contactless-payments-statistics 2- https://www.juniperresearch.com/infographics/qr-code-payments-statistics