Future of mobile payments led by younger consumers

Experts have been debating just how consumers will eventually adopt mobile wallet technology as a form of everyday payment, though most agree that this will happen sometime in the next few years. Some also note that it will likely be younger people that lead the charge.

For many analysts, their belief in the eventual adoption of mobile wallet technology as a viable alternative to traditional credit card use is a question of “when,” not “if,” according to a report from the Credit Union Times. To that end, the Members Group, a card payment processing company, recently held a webinar that highlighted the likelihood that it will be younger borrowers leading the charge to the new payment system, just as they did the same for mobile banking back when that was still a burgeoning option that few trusted over traditional or even online account management options.

Projections for the Mobile Payment Industry

“Mobile is the key technology for future growth,” said TMG executive Brian Day, who led the webinar, according to the site. “As an industry, credit unions are not doing a great job attracting a younger demographic. Gen Y is adopting smartphone technology. Nearly two-thirds regularly access the Internet with a mobile phone. Many value mobile banking more than online banking.”

TMG believes the payment industry will likely take a number of turns within the next few years as mobile becomes more readily available to consumers and more see the benefit of adopting it to make their everyday purchases, the report said. Consumers now rely on what are termed “three Ps,” presence, preference and payments. All of these can be driven by smartphone use in ways that may not be possible for traditional and online options.

Currently, though, there has only been a slow movement toward mobile payments as a viable financial option, both because of a lack of availability for smartphones that carry the necessary technological equipment, as well as consumers’ fears that this type of system cannot fully protect account data. However, experts say that both these should be addressed soon, the former as more companies are rolling out near-field communications enabled smartphones. On the other hand, consumers must be brought to understand that mobile wallets are actually more secure than traditional credit cards, which may only happen through use of the systems over time.

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