One of the biggest trends expected in 2015 is mobile payments. More and more Canadians are using their cell phones instead of their wallets to purchase goods. The trend for quicker transactions has captivated consumers and retailers alike. 2015 is the “tipping point” for retailers, banks and telecom companies to adopt the technology, allowing consumers to make relatively small payments within seconds with their smart phones.
According to a Deloitte report published on Tuesday, in 2015, about five percent of the 600 million NFC-equipped smartphones worldwide will be used to make an in-store NFC payment at least once a month, more than a 1,000 percent increase from 2014, making its way to Canada at the end of 2015. By the end of 2015, it expects one in 20 smart phone owners to have made a mobile payment with their phone.
Duncan Stewart, a director at Deloitte Canada, said there now is more phone models with the technology, called near field communication, and more retail locations that can accept the payments.
“Canadian smart phones are already being used to check balances, transfer funds and transact online, which indicates that consumers are comfortable with using their phones to handle money. But almost no one used their phones for contactless in-store payments at the register,” said Duncan Stewart, Director of TMT Research at Deloitte in Canada. “2015 will be the first year in which all of the requirements for mainstream mobile payments – satisfying financial institutions, merchants, consumers and device vendors – have been sufficiently addressed.”
Canadians are becoming more familiar with using their credit cards to tap and pay, whether it is a coffee shop, a spa or a drugstore. The transition to use their smart phone in the same manner should be an easy one. A higher spending limit for payments using smart phones, around $100 versus $50 for credit cards will also make the transition more attractive.
Stewart said adoption will be driven by retailers who see benefits to promoting contactless smart phone payments, such as the ability to process transactions and to integrate loyalty programs and special in-store offers seamlessly.
“The real benefit to the retailer is speed,” he said. “They don’t need to handle cash, or customers typing in a PIN. It moves people through the stores faster.”
The Deloitte report also noted that one of the impediments for retailers may be the cost of installing new point-of-sale machines equipped to handle the new technology.
Deloitte’s report is based on interviews and research conducted with more than 8,000 clients, industry analysts and global leaders from June to December.
The trend for increasing mobile payments may not be considered “mainstream” by the end of this year. Many consumers will not completely stray from their physical wallet for some time. What is certain is that a new revolution for making faster and more convenient payments is upon us with this new mobile technology. I wonder if our indebted consumers are ready for it.
For more articles from OCCA Consumer Debt Relief, please visit our finance blog at www.occa.ca/blog..
Recent Comments