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Are mobile payments the way of the future?

Are mobile payments the way of the future?

4/3/2014

Thanks to mobile payment systems, smartphone owners' purchasing options are more flexible than ever before. If a mobile user needs to buy a last-minute train ticket, he or she can do so using a smartphone app. No longer does the individual have to wait in line at a ticket machine and risk missing the train.

Meanwhile, customers at coffee retailers are using smartphone apps to save time at the register. Mobile Payments Online reported that mobile and gift card payments account for more than 30 percent of all transactions at U.S. Starbucks locations. The franchise's CEO, Howard Schultz, also said that 10 million customers now use the company's mobile app to make purchases.

As more consumers realize the convenience afforded by mobile payments, these transactions seem likely to grow in prominence in the coming years. According to a 2013 Ayden report, mobile purchases made up 19.5 percent of global payments in December of last year. This represented a 55 percent increase from 12 months earlier.

How businesses are embracing mobile transactions 
The widespread growth of mobile transactions will force pressure on retailers to adapt their methods to stay competitive. 

"Ease of payment is vital for merchants to keep up with the evolution of mobile devices and consumer behavior," said Ayden's chief commerce officer, Roelant Prins. "Businesses are focusing on enhancing their payment interface over mobile channels to make it responsive, simple and clear for users."

Starbucks is one such company. Its mobile app lets users add funds to their Starbucks Card accounts. When they get to the point of sale, a barista simply scans a barcode from the device screen to complete the transaction.

While mobile transaction apps aren't exactly new, they are becoming tremendously popular among smartphone owners. According to The Telegraph, Barclay's Pingit app has been downloaded more than 2.5 million times. The app allows mobile users to purchase items by scanning QR codes or showing their phones to cashiers. PayPal, a payment service company that launched its app in 2008, lets individuals make peer-to-peer money transfers using a phone number or email address. The app's users can also check their account balances and make transactions in select stores and restaurants.

Convenience can come at a price
Despite the advantages of mobile payment systems, many individuals are still hesitant to embrace the technology. Unauthorized purchases and fraudulent activities remain pertinent concerns. The Telegraph reported that there have been instances of major retailers' contactless transaction systems taking customers' money without permission. Meanwhile, NFC technology - a common feature in mobile transaction platforms - requires no additional authentication after a smartphone has been scanned, according to Mondaq. As such, mobile payment systems offer fraudsters a convenient means of using victims' credit card information without getting caught.

Fortunately, individuals can find these criminals and regain their financial security with ProtectCELL's identity protection program, which provides LifeLock specialists who thoroughly investigate fraud cases and work to restore victims' identities. The program also lets users back up contacts, texts, photos and music, and erase information that could be valuable to fraudsters. 

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