Who Really Benefits From Payment Apps Currently
If we look back at human history, we see that at some time period or another, humans have depended on a specific model of payment. Grains, livestock, food, shells, stones, metal coins, gold, paper, plastic cards, and online transfer have defined our financial and payment history.
At the turn of the 21st century, the growth of technology and the advent of digital platforms ushered in the next phase of financial payments and transactions. With countries like India and China leading the push towards online payments, mobile wallets and apps have become popular.
According to data, mobile apps are growing faster than credit or debit card adoption. You can use mobile payment apps through a smartphone or a tablet device. You can log onto your payment wallet, store your banking information, and attach your debit card.
Individuals use a mobile payment app for multiple things. For example, they can use it to directly send money to a friend, relative, or colleague just by entering their phone number. Or, they can buy things at any store, scan the payment barcode and make payments from the phone.
Examining the Growth of Payment Apps: An Analysis
It would be fair to say that without the deep penetration of smartphones, mobile payment apps would not have reached the crescendo that they are witnessing right now. With tons of new and affordable smartphones in the market along with improved internet data and plans, every individual on the planet became armed with a smartphone.
There is no denying the fact that technology and internet adoption has helped in the growth and adoption of mobile payment apps. Traditional financial institutions like banks have also come on board to facilitate better ease of access and adoption. Adding your bank details to mobile wallets does not take more than a matter of a few minutes.
Mobile payments became incredibly popular first in the Asian continent thanks to a large percentage of the world’s unbanked population. It then slowly spread to Europe and the American continent. In its recent avatar, payment apps have mimicked banking facilities, including checking out functions to enable complete services and operations.
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Major Benefits of Mobile Payment Apps in 2022
In this section, we are going to look at some of the major benefits of why mobile payment apps have become so popular in terms of rapid adoption-
1. Eliminates the possibility of using physical wallets-
If you have been someone that has always been mindful of opening your physical wallet in front of strangers in public places, you know what we are referring to. By not having the need to do so, you are avoiding the possibility of people knowing what kind of cash is in your wallet. This includes the type of cards you are carrying along with other government authentication.
2. Promotes a better and safer model of making financial transactions-
Most mobile wallets are operated using touch ID through a fingerprint scanner. Most new smartphones come with fingerprint locking capabilities, while some even have facial ID. Security codes on mobile wallet payments are generated every time a transaction or payment is made. This makes it far more secure than having to press your pin number every time.
3. Better and more convenient for merchants handling low denominations-
The struggle of providing change when you get a hundred-dollar bill is real. Small shopkeepers and business owners need not worry about arranging for a ton of change to run day-to-day transactions. They can simply request their customers to use mobile payment apps. Merchants are provided with a barcode scanner. All you need to do is scan and make the payment!
4. Removes the need to visit the ATM for withdrawing cash all the time-
Banks have now started placing transaction charges on ATM withdrawals beyond a limit. For example, if you withdraw more than three times, you will incur a charge the fourth time around. With mobile payment apps and wallets, you do not have to go running to the ATM every time you have to make a payment. Simply use the smartphone app and you are good to go.
5. Faster payments are possible to friends and relatives in cases of emergency-
We have all come across situations when someone in our circle is in dire need of financial assistance. It can be because they have had a medical emergency or any other problem. If both of you are using the same mobile payment app (even a different one), you can send payments almost instantaneously without any problems. This will help them get access to immediate funds.
Who Really Benefits from Payment Apps Currently?
Many people are interested in how payment apps and mobile wallets make money. The fact is that the same cannot be easily understood. Most payment gateways like Google Pay are not making any money from normal payments or transactions. They want to extend reach. The rapid adoption and increase in digital payments are a testament to their success.
Others are tying up with large businesses to enable ease of sales on a large eCommerce platform or another. You can say that the ease that these mobile payment apps bring is enabling more transactions and payments. Over the next few years, some avenues of monetization will emerge. It can include built-in financial products, subscription models, and more.
There are many critics that point out that the sensitive nature of data that is being stored can be a minefield of opportunities for payment companies. They can harvest the data, link it to preferences, and target consumers with ads. While this is a longshot, it can happen, if these companies are able to navigate the murky waters of sensitive data sharing.
The Final Takeaway
Using payment and mobile apps is beneficial both to the consumer as well as for the business. It eases trade and commerce, provides a more secure way of doing business, and extends banking facilities to people in less developed areas of the world. If you have any other questions, you would like us to address on the topic, please let us know in the comments below.