We’ve written about accepting mobile payments quite a bit in the past month, and our impression of this rising star in the payments space has been largely favorable. But, like any new technology, there are negatives to every positive. Here are a few reasons why mobile payment systems may not be as great as we thought:
Millennials and Accepting Mobile Payments
The Millennial generation serves as the primary audience for mobile wallets and mobile payment systems, thanks to their categorization as “tech-savvy”. Millennials have proven that they monitor their money and their spending regularly, prefer loyalty programs from businesses they frequent, and are drawn to brand engagement. This generation has surpassed the so-called Baby Boomer generation both in population and tech-appreciation, and, while older generations have similar financial desires, only 7% of them had a desire to learn and use mobile wallets according to a recent survey.
Current Payment Forms Continue to Exist
Despite recent technological advances, cards, cash, and even checks are still accepted as payment at most businesses. Accepting mobile payments may be new to the payments ecosystem, but most businesses still honor all payment methods. Banks in particular still accept physical checks to be deposited, with no signs of stopping in sight. Cash may no longer be king in the United States, but mobile payment systems aren’t replacing standard payment methods.
Keeping Track of Automations
With automatic payment options like Amazon Dash or payment for subscription-based services, little exists to keep track of when these automatic transactions take place (unless you’re really, really good about keeping track of every one of your transactions, in which case – teach me your ways!). It has been suggested that blockchain technology, with its secure data structure and shared ledger capabilities, would allow for transactions to be aggregated, safe, and well-tracked. Commonly associate with Bitcoin tech, blockchain keeps record of transactions in a secure ledger by “constructing a chain of cryptographic data that is nearly impossible to duplicate”. While this is a likely solution, it has not been determined in which direction mobile payment systems will grow.
So, is accepting mobile payments all that it’s cracked up to be? Despite criticisms associated with ease of use, security, and a noisy ecosystem, we think yes. It’s important to recognize that new methods of payment take a long time to become commonplace and, with further use and more advancements in the technology driving mobile wallets, we believe that mobile payment systems are definitely here to stay.