Consumer trends are always changing, and it's crucial that businesses and other organizations be updated on the latest patterns to stay relevant. One consumer practice that is undergoing rapid change is the way people pay for goods and services.
There are many options available to consumers when it's time to make a payment or a purchase. Cash, credit and debit are tried and true payment types, but the emergence of mobile alternatives have given consumers an even wider array of possibilities of choose from.
In many ways, this is a positive thing. Mobile wallets make paying for an item or service much more convenient. They also offer a new level of security, which is especially attractive at a time when so many consumers have been affected by major data breaches at popular stores like Target and Home Depot.
Despite the many positive aspects of mobile wallets, though, there are also some drawbacks. While consumers are beginning to embrace the technology, only some businesses have successfully adopted it, and this is especially true in regards to online mobile payments. In many cases, payment processes that are difficult to understand or overly lengthy cause consumers to get frustrated and abandon their shopping cart.
According to PYMNTS, this has resulted in the loss of about $147 billion of revenue. To prevent this issue from continuing, it's crucial that online payment platforms are simple to understand and use as well as secure.
One solution on the market
PYMNTS described one solution to the issue of mobile payment friction. It comes from a company called Minkasu and provides companies with the ability to securely accept payments without login information, like a username and password.
The advantages of Minkasu's payment solution include the fact that it works regardless of operating system or device. It also has four patented security technologies that keep information safe.
The company's CEO, Anbu Gounder called the security feature "front-end tokenization" and it involves credit card numbers being split into two groups, randomized and stored on separate devices: one piece on the phone and the other in the cloud. Only the correct fingerprint can bring the pieces back together to be used for a payment.
Credit unions must adapt, too
There are plenty of companies out there making mobile payments easier for consumers. It's important that businesses, credit unions and other entities choose one that works for them and their consumers.
According to a study from the Filene Research Institute, payments represent about one-third of banking revenue worldwide. Additionally, consumers predict that their use of cash and cards will decline significantly in the coming years. Instead, they will rely more heavily on mobile payment platforms, though they won't necessarily be loyal to any particular brand.
This means it's crucial that credit unions, businesses and other organizations must act now to perfect their online mobile payment platforms. In an article announcing the report, CUNA Council explained that a streamlined payment process, secure features and consumer incentives will help keep members around - not brand loyalty.
"Payment methods are a credit union's closest everyday tie to members," Ben Rogers, Filene's research director, said, according to CUNA Councils. "If we get them right, we'll surf the wave of disruption. If we get them wrong, big banks and technology upstarts will quickly siphon away transactions, and then members."
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