No one is sure when exactly money came into existence. Some speculate that systems of exchange date back to at least 100,000 years ago. However, what is a certainty, is that, over the past century, the way economic units get transferred has changed substantially. The internet is the most at fault for that, as this communication technology has altered the way we live our lives and how we transact with one another.

Credit card terminals got introduced in 1979 by Visa. Two decades later, PayPal stepped onto the scene, and now, mobile technology is further redefining monetary transactions. Every year, a new service pops up, and new economic potentials open up as the world quickly adjusts to a fresh set of financial rules. The events of 2020 only accelerated unavoidable looming progress while instigating minor inventions. Below, we analyze the current payment trends occurring globally.

The Mobile Wallet Surge

A mobile wallet is a cloud-based account that stores payment information. Users can supply their digital pocketbooks with money in a myriad of ways. After they do so, they can transact with this capital through dedicated mobile software or a web interface. These wallets are a super convenient and safe method for in-store and online purchases.

According to Juniper Research, in 2019, the number of mobile wallet users reached 2.1 billion. In 2020, this software-based payment solution was the second-most popular one for in-store use, behind cash (34%), with a market share of 22%. However, these overall percentages do not accurately reflect the situation in distinct regions. For example, in the US, credit cards are still king. Card payments in America account for more than 38% of retail store sales. Though, the US is notorious for lagging behind other markets when it comes to payment technology adoption. They implemented EMV credit/debit card chips far later than many European countries and are now dragging their feet in making mobile wallets mainstream.

PayPal is still the market leader with more than 360 million active account holders, but Apple Pay, Amazon Pay, Samsung Pay, and Google Pay are rising contenders, which should claim a larger market share in the coming years. Statista claims that, in 2021, mobile payments will be responsible for $3.5 trillion in sales, making up 72.9% of all e-commerce.

Mobile Point-of-Sale

Mobile point-of-sale (mPOS) is a revolutionary technology that enables wireless devices to act as cash registers. Any phone can morph into an mPOS terminal through a downloadable app. Depending on the software used, a mPOS can link into a legacy POS system or stand-alone, connected to a company’s single bank account.

This invention enables businesses to conduct versatile financial transfers without getting tied down to one location. It speeds up service, improves the customer experience, and frees up valuable real estate. Also, the system limits liability thanks to high-end transaction encryption and the fact that no debit/credit card data gets stored on the mPOS device itself. It aids small businesses by allowing them to take advantage of security technologies previously only available to large companies.

Per Global Market Insights, the mPOS terminals market, in 2019, surpassed $20 billion, and it should keep growing at a compound annual rate of 19% until 2026. GMI believes that rising internet/smartphone penetration in India, China, and South Africa will drive this market’s growth.

Development of Purpose-Specific Payment Methods

While most massive brands (Apple, Amazon, Google) look to develop mobile wallets for general e-commerce, lesser established fintech companies aim to invent technologies that cater to niche markets. For example, DigiPay.Guru leverages its cutting-edge mobile payment solution to help customers pay for their fuel without leaving their car. Or pay for parking via multiple modes like NFC, RFID, and a QR code.

MuchBetter is a Canadian brand that developed a mobile wallet app that caters to online gamblers. It lets players perform deposits with no redirects or cumbersome passwords. All they have to do is confirm a transaction on their phone to get in on some of the lowest wallet fees in the sector. Swedish Trustly went a step further and created Pay N Play, a system that lets online casino patrons enjoy slots and live dealer games with no registration. The sites that utilize this scheme bear the name – Pay N Play. Trustly is a payment method that facilitates money transfers via an online bank account without an app/card. It recently became available in the US and Canada.

Contactless Payments Are on the Rise

Contactless payments are a secure method that has been around for quite some time. Yet, it gained a massive popularity boost in 2020 due to the ongoing pandemic. It represents a quick and easy way to transact that does not require the entering of a PIN. All customers must do is wave a card/device in front of a terminal to purchase something. NFC and RFID technology make contactless payments work. The downside to this method is that there is usually a max payment limit to prevent fraud.

Again, Europe is far ahead of the US regarding contactless payments, as this method is super-popular in eastern Europe, France, Spain, and the UK. Juniper Research estimates that by 2026, globally, 53% of all in-store transactions will be contactless.

Biometric Authentication

Biometric authentication is a trend that gained widespread use over the past few years, as the rise of 2FA (two-factor authentication) occurred. It involves providing a person’s unique structural and biological characteristics for a payment to happen or for account access. Such attributes include facial recognition, vein mapping, fingerprint scanning, iris recognition, and heartbeat analysis. Thus, this kind of verification offers unparalleled security that makes fraud and identity theft virtually impossible.

Though SMS and email remain the most popular second layers of authentication, many mobile wallets now feature biometric verification. According to most advanced users, fingerprint scanning is the most-utilized option when it comes to biometrics. It has been around the longest and is the most reliable. As users get more tech-savvy, the mobile wallet sector expects to see a rise in the use of biometrics.