Five innovations shaping the future of mobile payments

The volume of mobile payments taking place online and in-person continues to grow. According to a Juniper Research study, the total number of contactless mobile payment users will reach 1 billion globally in 2024, which is a 60% rise from 2022.

As the popularity of mobile payments has risen, we have seen new technologies and platforms spring up that make paying from a phone simpler and more secure. To attract and retain the growing number of customers using their smartphone to buy goods and services, it’s important for businesses to understand these innovations and their impact on the customer experience.

Here are five trends set to have a lasting influence on the future of mobile payments.

Biometric authentication 

Biometric authentication is becoming ubiquitous for ordinary people. The technology uses physical characteristics, such as facial recognition or voice identification, to recognise someone and authorise their transaction.

In stores, the technology is most often used by customers to unlock their mobile wallet and make a contactless payment. As a result, people no longer need to carry physical cards or cash.

Similarly for online payments, the technology means customers can pay without their physical card, which reduces their likelihood of abandoning a purchase because they don’t have their wallet to hand. In this digital environment, biometrics can also improve security by replacing traditional passwords at risk of being hacked.

AI and machine learning

AI and machine learning is another relevant innovation when it comes to security and fraud detection. The technology can use historical data to identify signs of fraud and use this information to alert payment processors when a fraudulent transaction might be taking place.

AI can also work with other technologies to speed up the payment process. For example, it can power biometric authentication to quickly confirm someone’s identity and authorise a transaction. In addition, AI can route transactions to the most efficient payment networks and gateways to minimise processing times.

QR code payments

The use of QR codes – or quick response codes – to facilitate transactions is another innovation influencing the future of mobile payments. QR code payments have seen a surge in adoption over recent years, with purpose-built, scan-and-pay solutions making the option affordable for businesses and accessible for consumers.

Merchants can use QR codes to offer a scan-and-pay option online or in-store. When it comes to online purchases, open banking enables merchants to generate a QR code that takes customers to their preferred banking app to authenticate a transaction. This simplifies the payment process by avoiding the need for customers to manually enter their payment details.

Meanwhile, with in-store payments, there are tools that generate codes for merchants to give to their customers to scan. Or vice versa, certain mobile wallets will give consumers a QR code that merchants can scan to collect payment.

Tap to pay

Built-in smartphone features such as ‘Tap to Pay’ enable merchants to accept card payments with only a mobile device. Businesses simply need to integrate with a payment service provider (PSP) that processes this type of payment, saving on the need for additional hardware and payment terminals.

In the future, we may also see an increase in phone-to-phone payments between friends. For example, by someone opening their digital wallet, entering an amount and tapping a friend’s phone to settle a bill.

In-app social media commerce

Social media storefronts such as TikTok Shop and Instagram Shopping are becoming increasingly popular. Typically accessed by consumers from their smartphones, these in-app shopping experiences let people purchase items without leaving the social media platform to complete the transaction.

As they seek to develop their commerce platforms, social media companies are partnering with payment providers to ensure transactions are secure, private and inclusive. By working with payment companies, social media giants can satisfy consumer demand for a broad selection of payment methods – TikTok Shop lets customers pay by card, digital wallet and buy now pay later (BNPL).

Getting ready for the future of mobile payments

By leveraging the latest innovations in mobile payments, businesses can serve the growing number of customers searching for a quick, easy and secure way to pay from their smart device.

Paysafe partners with businesses to integrate cutting-edge technology into the payment process, so your business can easily accept payments from whichever device a customer is using. With solutions geared toward mobile-initiated transactions, real-time analytics and the convergence between brick-and-mortar and online payments, our tech helps businesses achieve runaway success and step up to the future of payments.