A mobile revolution is sweeping through the payments, banking, and telecommunications industries, according to Cartes Secure Connexions. In a press release, the organization highlighted important trends in these areas as mobile devices and other technologies offer compelling alternatives to traditional institutions.
Cash has essentially been overthrown, according to Cartes; citing data from Euromonitor International, the organization asserts that 2015 has so far seen dematerialized payment volumes overtake paper payments, with card payments poised to become the most popular means of payment globally in 2016. At the same time, contactless payments are also on the rise, with over a billion such transactions having occured between January of 2014 and July of this year, according to Visa Europe data. This trend in particular has also tied in with the rise of mPayment platforms like Apple Pay, Android Pay (which just launched), and the forthcoming Samsung Pay.
These trends pose a threat to traditional banks, and we have seen how the pioneering mPayment leader Apple Pay has run up against resistance from these forces. But these changes could also present opportunities to the traditional banks. Cartes quotes P.A.ID Strategies’ John Devlin as asserting that the “gradual convergence of traditional methods of payment with on-line transactions (in-app, peer-to-peer) offers banks the opportunity to more quickly take position as service providers,” which could ultimately lead to new services and new areas of revenues.
These trends are also helping to spur technological innovation as organizations seek to adapt to the digitization of payments, with biometric authentication emerging as a key solution in these areas; Cartes quotes Frost & Sullivan’s Jean-Noël Georges as suggesting that “biometrics appear an appropriate response to authentication and identification needs.” Meanwhile, technological advancements in the SIM card are opening up growth opportunities for machine-to-machine cards, with POS terminals increasingly being equipped with compatible readers.
It’s a time of profound change in these areas, in other words, and while it will require savvy adaptation on the part of entrenched interests such as traditional banks, new opportunities abound.