As Mobile Payments Pick Up Steam, Security Becomes More Important

February 21, 2017

The technology behind mobile payments has been around for some time, but it's only been recently that consumers and merchants alike started adopting it in larger numbers.

The technology behind mobile payments has been around for some time, but it’s only been recently that consumers and merchants alike started adopting it in larger numbers. With this in mind, it’s vital for smaller retailers and other businesses in particular to carefully monitor the trend toward broader use of these platforms, and determine when it will be wise for them to get in the game. Experts generally note, however, that the sooner merchants of all sizes adopt this kind of transaction, the more likely they will be to meet ever-changing and broadening consumer preferences.

Many in the retail food industry believe mobile payments will soon come to replace traditional and even relatively new card-based payment technologies, according to the latest What’s In Store report from the International Dairy Deli Bakery Association. While things aren’t expected to change much for the industry over the next few years, mobile could be something of a sleeping giant as more people get NFC-enabled smartphones and put them to use as a means of making purchases more convenient.

“Mobile applications and payment methods are likely to reduce the time and cost involved for many retailers, with usage likely to increase in the long term,” Michelle Grant, head of retailing for Euromonitor International, told the IDDBA.

Mobile payments are picking up steam, and security efforts are getting stronger as well.Mobile payments are on the rise, and security efforts are getting stronger as well.

Improving Security
With this in mind, it’s important to note that polls have shown that consumers are often reticent to start using mobile payments because they’re concerned these purchases are somehow less secure than a traditional credit card transaction, according to Business 2 Community. This is simply a misconception on the part of the skeptics, because mobile payments are actually much more secure than a credit card swipe, but it’s still a hump for consumers and merchants alike to get over.

As such, it may be vital for businesses to make sure their customers know about the security in place for these types of purchases, as well as what businesses themselves are doing to protect shoppers’ sensitive data, the report said. The more merchants can do to understand and react to consumers’ worries about how secure their transaction data will be, the better off all involved are likely to be in the long run.

Merchants Catching On
The good news is that companies of all sizes are now starting to understand the benefits that mobile and EMV can provide, and are therefore moving quickly to adopt the latest point-of-sale devices and software to meet that expectation, according to a new market report from Technavio. From 2016 through the end of 2020, it’s expected that the market for mobile payment security software will grow at a compound annual rate of 23.7 percent as more companies – not just merchants but also financial institutions – look to boost protections for consumer and retailer data.

With all this in mind, early adoption on the part of merchants could go a long way toward shoring up security and reducing card-present fraud. That, in turn, helps everyone in the payments ecosystem.

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