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The Future of Digital and Mobile Payments

The Future of Digital and Mobile Payments Credit: Mobile payment image via Shutterstock

With more and more shoppers preferring to go cashless, businesses are starting to place greater importance on finding new ways to accept digital and mobile payments.

In an effort to help meet these new consumer needs, MasterCard recently unveiled its MasterPass, a service that gives shoppers the ability to shop online and in-store using the same digital payment option.

In an email Q&A, BusinessNewsDaily asked Ken Moy, MasterCard's group head of U.S. emerging payments lead for global products & solutions, to shed some light on the current state and future of digital and mobile payments.

[See Related Article: 5 Mobile Payment Apps for Small Business]

Why do you think consumers have been resistant to use mobile payments?

If you've been following the payments industry over the past several months, you would have noted the increased interest and attention around digital wallets, like MasterPass. The reason for this is that consumers are embracing a digital lifestyle where their personal connected devices are at the epicenter of their day to day life whether at work, play, spending time with friends and family, or in engaging in commerce. With this evolving lifestyle, it’s natural to expect the shopping and payment experience to also evolve. For this to happen commerce must be intuitive and consumers must have confidence that their security and trust is protected.

Do you think the concept of mobile payments vs. digital wallets is confusing to many?

It’s not that it's confusing, but rather, consumers have a certain expectation when it comes to the payment experience. They want to pay when, where and how they want and they also want a consistent experience — whether physical or digital.

Do you think businesses are more resistant or consumers? If so, why?

According to a Forrester study, about half of retailers' top priority for 2013 is the optimization of mobile payments at check-out. I personally don’t think that anyone is resistant to the convergence of physical and digital commerce, but rather, both consumers and merchants are looking for a great experience. We all know that convergence is going to happen. In fact, it's already happening. The focus is more on who are those trusted partners that are going to deliver the technologies and functionality that will provide fantastic value and a great end-user experience.

Do you think mobile payment security is at the point where people can feel confident about using them?

Yes. MasterCard understands the importance of payments security — it’s at the core of everything we do. With our newest innovations in the digital payments space we’ve taken the time to ensure that security is at the heart of each transaction. It's our top priority to keep your personal information safe, and our secure servers are built and maintained to do just that.

What are the benefits for a small business to accept mobile payments?

The convergence between the digital and physical world isn’t in the future — it’s happening today. Mobile devices are rapidly transforming the point of sale experience, both for consumers and merchants.  By taking advantage of opportunities made possible by mobile devices, small businesses will be able to tap into the digital world that their customers are already very comfortable in and take advantage of electronic payments. As an example, there is already a surge of innovation in mobile point-of-sale (MPOS) technology. Small businesses and entrepreneurs that have previously operated on a cash and invoice basis are turning to mobile point-of-sale (MPOS) solutions to expand their customer base and sales.  Established retailers are also adopting MPOS solutions to engage consumers in new and innovative ways to enhance their relationships with their customers.

How do you think mobile payments will evolve in the next few years?

More and more we are seeing smart devices become commerce devices. Especially as smart devices become cheaper and more readily available around the world, digital payments will continue to become more accessible to the general consumer.  It’s going to be the responsibility of the issuers and merchants to deliver what the customer wants. With MasterPass, we’ve already seen over 180 merchants come on board for our roll out in the United States and we expect that number to rapidly grow as we reach more verticals. As digital commerce gains critical mass from a user/ acceptance standpoint, we can expect to see even more personalized commerce experiences evolve through things like location-based services, targeted couponing and experiences, and social engagement.

Chad Brooks

Chad Brooks is a Chicago-based writer and editor with nearly 20 years in media. A 1998 journalism graduate of Indiana University, Chad began his career with Business News Daily in 2011 as a freelance writer. In 2014, he joined the staff full time as a senior writer. Before Business News Daily, Chad spent nearly a decade as a staff reporter for the Daily Herald in suburban Chicago, covering a wide array of topics including local and state government, crime, the legal system and education. Chad has also worked on the other side of the media industry, promoting small businesses throughout the United States for two years in a public relations role. His first book, How to Start a Home-Based App Development Business, was published in 2014. He lives with his wife and daughter in the Chicago suburbs.