The Future of Mobile Payments
Our smartphones are something that we carry with us everywhere. We rarely find ourselves going somewhere without taking our phones. Our phones contain everything, from social media to a camera, phone calls to text messages, and then we have payments.
Mobile payments first started in 2000. The first patent exclusively defined “Mobile Payment System” was filed in the same year.
Most people prefer to pay with their phones, mostly because it’s hassle-free. You don’t have to worry about change, you can directly pay the required amount.
From experience, at least in India, most people ask, “Is Google Pay available?” when it’s time to pay, and usually, the answer is a yes. The sophistication of modern payment systems allows customers to just scan a QR code to pay, making transactions quick and convenient.
Mobile Payments in India
According to BusinessOfApps, Google Pay had an annual run rate of $110 billion in transaction value in 2019.
According to various sources, PhonePe, Paytm, and Google Pay are the most used payment apps in India. BHIM is also a widely used payment app in India. These apps are UPI apps. UPI stands for Unified Payment Interface, it’s a real-time payment system developed by the National Payments Corporation of India. UPI apps have a single QR code, you can scan it with any UPI apps (though most popular ones are the ones I’ve mentioned above), and you’ll be able to pay.
UPI transactions see a 650% rise at semi-urban and rural stores. At this point, most of India has UPI in every store.
Globally
According to BusinessOfApps, Apple Pay has the most used transaction volume of any mobile payment service outside of China. It is the most popular mobile payment service in the US.
PayPal, Cash App, and Venmo are some of the most used payment apps in the US. PayPal is mostly used for online payments, even international payments.
Alipay was the largest payments platform in the world, processing $17 trillion in transaction volume in 2019.
The case of Apple Pay, you see, is that there are 1.74 iPhone users in the world, and 136.8 million users are from the US alone. The best bet for these users is to use Apple Pay. It’s seamless pay system built on NFCs is brilliant.
NFC stands for Near Field Communication, a wireless communication technology that allows two electronic devices to communicate with each other over a short distance (typically a few centimeters).
Apple Pay uses NFC. These days, NFCs are used by many apps and most credit cards, which allow for tap-to-pay. NFC tech is also used by bus/train passes.
According to BusinessOfApps’ statistics on mobile payment apps by users, AliPay comes first with 650M users, followed by WeChat Pay(550M), Apple Pay(507M), Google Pay(421M), PayPal(377M), Paytm(333M) and PhonePe(300M). Samsung Pay(140M), Venmo(52M), and Cash App(36M) are the least used in the chart.
As you can see, both of the chart leaders are China’s apps. Apple Pay and Google Pay are widely used outside of China.
Thoughts on Mobile Payments
I can personally imagine of a cashless future dominated by digital money. It’ll be a couple of decades, but there’s a good chance. Smartphones are indispensable for us. Since we take it with us everywhere, why even bother taking your wallet? It’s all on your phone. You can do everything with it now. It’s just better to make payments with your phone. With most payment apps, you should even be able to use your smartwatch to make NFC payments. With Apple Pay, you can use your Apple Watch to make payments.
The fact is most companies even support cryptocurrency payments.
Just make sure to carry at least some cash with you in case your phone dies. Better safe than sorry.
Mobile payments sophisticate our already sophisticated lives. They make our payments more secure and easy. Mobile payments are efficient for quick buys. To be honest, it’s better to set up your mobile payment app before getting a credit card. These apps also make it easy to send money to friends and family. Apps like PayPal and Cash App also make it easy to set up donation links.
Fun fact: Along with Peter Thiel, Max Levchin, Luke Nosek, and Ken Howery, Elon Musk played a critical role in the early development of PayPal. In 1999, he joined the founding team and served as CEO from 2000 to 2002, where he helped secure funding, improve the company’s technology, and expand its user base. In 2002, PayPal was acquired by eBay for $1.5 billion.
PayPal was originally called Confinity, which later merged with Elon Musk’s X.com and was renamed what it is today.