Fraud PreventionMember Owned and OperatedMerchant ServicesPaymentsSales

Digital Wallets: Taking The POS Space by Storm

You probably remember the first time you saw it, that moment of confusion, curiosity, and interest. You watched the person in front of you in line simply wave their phone over the credit card reader, and after the confirmation ding, the receipt was printed and they were on their way.

What the heck just happened? Is there an app for this store? Can my phone do that?

By now, chances are you know exactly what that customer used, and may even whip your phone out at check-out nowadays as well. You’re certainly not alone if you do; in 2021, over 100 million Americans used contactless mobile payments, such as Google Pay or Apple Pay. That number will only grow in the years to come.

The Pandemic Sparks a Revolution

As recently as 2019, tech pundits were discussing why Americans weren’t adopting mobile payment technology like people in other countries, including China and India. What a difference a couple of years can make! The technology exploded in 2020 and 2021, with Americans adopting “tap payments” in droves. The catalyst, like so many digital transformations, was the pandemic. Simply put, we’re a lot more aware of germs than we were before they totally uprooted our lives. 

Keypads, one less thing to touch!

In a recent chat regarding the surge in mobile payments, one member of the COCARD team touched on a major factor that makes mobile payments a superior experience: hygiene. As she explained, it’s about being able to transact in stores without “touching little buttons that you know thousands of other people have touched”. Regardless of a store’s hygienic practices, you can’t beat a contactless experience when it comes to protecting yourself.

The technology isn’t just about biological safety. By creating a layer of third-party authentication between the customer and the merchant, as well as anyone else who may be snooping on the transaction, digital payments offer superior security to a physical card. They’re harder to use to make fraudulent transactions for the following reasons:

  • A customer is more likely to quickly notice a lost phone than a lost card, as well as to quickly locate it or shut it off.
  • Biometric authentication, such as a thumbprint, is now the standard requirement for mobile transactions or even to access smartphones.
  • There’s no PIN punch to observe, no card number to see, and no static information to capture and use for credit card fraud, online or in-person. 
  • Customers can immediately see every purchase amount reflected on their mobile app, ensuring real-time authentication of each transaction.

The pandemic may have catapulted interest in contactless payments, but the trend is here to stay because the technology adds major value over traditional cards. To illustrate, over 80% of both millennials and GenZers, the future’s largest generations, used a digital wallet in the past year. Now that mobile payments have reached widespread adoption, customers realize that using your phone to pay.

isn’t just about avoiding microbial hitchhikers. There is an added level of security, convenience, and information that empower customers and will keep them loyal to mobile payment solutions.

Contactless Payments: Not a Fad, Not a Niche Preference

Many business owners feel that it’s perfectly fine to only accept cash or card. They see no need for an investment in tap functionality if it means overhauling their POS system. They know that most Americans still pull out their wallets when it’s time to settle up. More and more people reach for their phones, but almost always have a physical payment method on hand in case contactless payment isn’t an option.

If it ain’t broke, don’t try to fix it. This old adage could be written on the tombstones of a long line of businesses that failed to adapt when a better solution emerged. It’s one of the most dangerous ideas in the fluid, competitive environment that defines American enterprise.

Think of Blockbuster, Kodak, and Sears. These are companies that were innovative and well-managed. They generated tremendous value for their shareholders and customers for decades. What happened to them? In each case, when a disruptive technology emerged, they leaned into that old adage. They didn’t adapt to clear changes in technology and consumer preferences. When it comes to payment processing, we’re once again on the cusp of a dramatic change.

Mobile Payment Adoption: A Conservative Projection
Image and Source Credit: eMarketer

The bottom line is that we don’t see massive, persistent adoption of a new solution unless it’s truly adding more value than yesterday’s tools. We’re seeing that massive adoption of mobile payments, around the world and certainly here in the United States. 100 million Americans used a proximity mobile payment app, such as Google Pay or Apple Pay, in 2021. eMarketer projects that the figure will grow to 125 million, or 50% of American smartphone users, by 2025. We expect the number to be even higher, with a comfortable majority of Americans paying with their phones by the middle of this decade.

COCARD: Future-Proof Solutions                

At COCARD, we know from experience that the payments space moves fast, and people either thrive on new solutions or get left behind. In the last twenty years, we’ve seen consumer habits continue to evolve as fast as the technology that serves them.

We fiercely value our members, their clients, and the customers we all strive to better serve. That’s why we never stop innovating and integrating the latest technology and preferences into our POS line-up. Our Revonu line, from our standalone hardware to tablet software solutions, are all fully compatible with mobile payments, in addition to a host of industry-leading features. If/When payment preferences change again, we guarantee that COCARD will meet the moment like we always have.

Our goal is to make sure our merchants not only meet their customers’ needs today but continue to offer a superior payment experience no matter how the landscape changes. Our research and experience tell us that contactless digital payments are here to stay, and fortune will favor those that adapt to this preference. This isn’t the first shakeup we’ve seen in our industry and it certainly won’t be the last. That’s why we constantly strive to stay ahead of these powerful trends and deliver the best experience on the market. 

Get in touch today to take on the 2020s with Revonu.