The Pandemic Has Boosted Mobile Payments – But There’s Still Potential for Insurers to Tap
Mobile technology is changing many aspects of daily life, and that includes the way people pay for things. During the pandemic, mobile payments took on a greater importance, but tremendous potential remains untapped. Here’s a look at the current trends in mobile payments.
The Pandemic Gave Mobile Payments A Needed Boost
Mobile payments existed long before the pandemic. According to Forbes1, the first mobile payments at the point of sale occurred on May 26, 2011, with the launch of Google Wallet. After that, the market saw a string of mobile payment options, some more successful than others. Then the pandemic hit, and it caused a sudden surge in demand for contactless payments. It was mobile payments’ time to shine. Retailers reported a 69% increase in contactless payments, and in-store mobile payments increased 29%1.
Businesses that refuse to adopt mobile payment tech may be missing out. According to CNBC2, a Visa survey found that about half of consumers say they won’t shop anywhere that doesn’t offer contactless payments.
But what happens after the pandemic when life returns to normal? Although some people might go back to other forms of payments, many people have gotten used to the convenience of mobile payments, and they’ll probably want to keep using this method. According to Yahoo Finance3, a report predicts that mobile commerce will make up about 80% of all e-commerce in 2025.
Everything Is Going Digital
Mobile payments are only one part of a bigger mobile trend. According to The Wall Street Journal4, driver’s licenses, work IDs and other items that used to be actual cards, are now all going digital. Physical wallets are becoming outdated as smartphones replace them.
The Guardian5 states that laws on carrying driver’s licenses vary by country, but the next iPhone operating system will actually include a mobile license feature.
If physical wallets really do become obsolete, mobile payments will become one part of mobile everything.
New Players Are Making Waves
According to Forbes6, PayPal has been losing its dominance in the mobile payments sphere. Although still the most frequently used mobile payment app, other mobile payment providers are growing in popularity. Apple Pay, Google Pay and Square Cash are quickly gaining ground. In the 2020 survey on mobile payment app usage, PayPal came in with 43% of users making purchases with the app on a weekly basis, while Apple Pay came in at 41% and Google Pay at 29%.
The rise of merchant mobile apps is another factor. Every week, Americans have about $3.2 billion in the top 10 merchant mobile apps.
Competition is fierce, and that can only be a good thing for innovation and progress.
But There’s Still Room For Growth
Mobile payments are taking off, but not everyone has caught on quite yet. Some people may be worried about security issues. According to Yahoo Finance7, UnionPay’s Cashless Payment Adoption Study found that 61% of people who don’t use mobile wallets cite security as a concern.
Other people may be clinging onto old payment methods out of habit. There’s a significant generational gap among mobile payment users. According to Payments Journal8, 47% of Gen Z and Millennial consumers prefer mobile e-commerce, while only 28% of Gen X and 10% of Baby Boomers do.
As security and education improve and a new generation brings digital options into the mainstream, mobile payment opportunities should continue to grow.
Insurers Must Seize The Potential
Insurers must offer digital payments to keep pace with consumer expectations. As discussed last month, digital wallets are the future of payments, and many innovative insurers already allow policyholders to download digital ID cards, which can be stored in an Apple Wallet or other digital devices.
Fortunately, it’s easy to keep up with One Inc by your side. Our Digital Payments Platform manages both incoming premium payments and outgoing claim payments from a single user-friendly platform that accommodates mobile payment options. And with One Inc, your customers can experience payment continuity across payment channels – web, mobile app, or by phone (IVR).