A growing number of financial institutions are embracing both the concepts of mobile pay and the use of blockchain to facilitate faster and more secure transactions. Combing these two technologies could lead to greater innovation and faster payment services in both the cryptocurrency market and the traditional fiat currency one.
Why Are Mobile Payments Important?
Mobile payments are taking over the financial world. Early adaptation of this technology in Asian markets has spread to North America, with virtually every financial organization offering its customers mobile payment options. Mobile payment gives customers instant access to their funds, allowing them to make transactions, including paying for goods and services, using their mobile phone or other mobile device.
There are a few widespread advantages to the widespread adaptation of mobile payment. The first is that it fosters economic growth, both locally and on a national level. The Pew Charitable Trusts estimates that in 2016, the global revenue for in-store mobile purchases was almost $75 billion. Part of the reason this number is so high is that it is incredibly easy to access funds, without the need to carry a wallet, debit card, or cash. Customers also appreciate the convenience mobile payments offer in emergency situations, when you may not have enough cash on you to cover emergency room copays or towing fees.
How is Blockchain Technology Helping with the Advancement of Mobile Pay?
While mobile payments are arguably much more secure than carrying around cash, there are many customers who are reluctant to adapt this technology. In most cases, there are worries about the security of the app or the possibility of fraudulent transactions. There have been a few notable security breaches at a number of financial institutions in the last few years, which may serve to validate those fears in many cases.
Blockchain technology is already reshaping the way the financial system works, with some organizations across the globe already using this type of tech to ensure secure and low-fee transactions. When this technology is used in connection with financial transaction, it virtually removes the risk of fraudulent transactions or having the data hacked and altered. As a result, customers can feel more secure in adapting and using mobile payments when the blockchain is involved.
Having blockchain technology shape the future of mobile payments has numerous benefits to the field, even aside from the boost in adaptation that the increased security can provide. Anytime blockchain technology is involved, the fees per transition decline. Depending on the sums you are dealing with, this can be notable savings. Using blockchain makes keeping money in mobile wallets for easy mobile payment much more affordable. There are no banks nor other central processing companies involved, reducing the number of fees that are owed in connection with each transaction.
Money transfers made using mobile payment apps can also benefit from the incorporation of blockchain technology. This refers to large sums of money being transferred in connection with contract signings or loans as well as peer to peer lending of smaller amounts. When you rely on the blockchain to facilitate these transactions, they are incredibly secure, much more so than other internet e-transfers or the use of popular money transfer apps like Venmo. As with mobile payments, mobile transfers also come with very low fees, since there are no banks involved to skim their share.
As the use of this technology becomes more popular, users can expect to see it slowly introduced into everyday life. For example, in China, many street vendors accept mobile payments facilitated by blockchain technology. They simply present customers with a QR code and wait for a digital receipt to be displayed. While North American vendors are not as ready for this type of adaptation, experts expect it is going to come within the next five or so years.
Cashless payments have already taken over the market, with many people using mobile apps to facilitate transfers of cash from one account to another. As blockchain technology is more widely adapted, consumers can expect to see all types of financial institutions eager to incorporate that tech into their platforms. Blockchain is, in essence, a record book that cannot be changed or hacked, making it appealing for financial institutions and wary consumers alike.