Mobile payments and the Internet of Things

If the analysts are right, currency is dying and mobile payments are the future.

Certainly, there have been giant leaps forward in this area so far: Apple Pay, Google Pay, and other e wallets are beginning to make a significant impact on the payments landscape, and the Internet of Things could also transform the way we make mobile payments.

The Evolution of Mobile Payments

E-commerce changed the way we shop, but there’s a new trend taking over: the rapid adoption of smartphones and smartphones means a growing number of consumers are choosing to shop on the go at their own convenience.

Mobile commerce – or m-commerce – has also been given a boost by contactless payments and e-wallets, and there’s a further trend developing, too. Major corporations have been looking at how they can do things differently to make shopping easier for the busy consumer.

As an example, Wal-Mart has given us Wal-Mart Pay to make shopping quicker and easier, and many QSR businesses have been quick to realize the advantages of custom payment solutions. Taco Bell is just one of the big players that has developed its own app, allowing customers to order on to go and collect their meal from the drive-thru or in-store on arrival.

These developments are all contributing to the growth in mobile commerce, and by 2020 mobile payments are predicted to be worth $503 billion.

How Mobile Payments Looked in 2016

As predicted, 2016 has been a good year for mobile payments. In October, said 62 percent of smartphone users had made a purchase online using their mobile device in the last six months, and there was increased demand for m-commerce at peak times like Black Friday.

With advances in technology and the ready availability of smartphones, the sharp increase in mobile payments shouldn’t be a surprise, and many merchants have realized they need to invest in mobile if they are going to best serve their customers.

2016 was also a strong year for mobile wallets, with continued growth for leaders in the market, and mobile wallets have been used by almost 50 percent of Millennials.

Mobile Payments in the Future

Mobile transactions are encouraging Internet shopping. Research indicates that consumers are “becoming first-time eCommerce users through their smartphones or tablets”, and in a few years’ time it is thought mobile devices will be used for more than 50 percent of transactions carried out online.

If the predictions are realized, this will mean two billion tablet users worldwide will have made an m-commerce transaction by the end of 2017. However, the real game changer for mobile payments is predicted to be the increasing use of Bluetooth. Bluetooth is already used by the mobile payments industry; it offers many advantages to today’s consumer such as frictionless payments and faster transaction times.

Throughout 2016, there have been many developments/announcements regarding Bluetooth payments, including the recent news from Future Group, who will be rolling out a payment and check out system to win over 1 million consumers, and the technology is there to make Bluetooth payments even more effortless than they already are.

One day, Bluetooth could allow hands free to become commonplace. Google has already spotted the potential of this; it has already piloted hands free payments at Papa John’s and McDonalds. However, despite these advances, it is likely to be some time before hands free payments become part of everyday use.

Mobile Payments and the Internet of Things

Looking further into the future, there is one area that has the potential to transform the mobile payments landscape: The Internet of Things, which is defined as:

“The interconnection via the Internet of computing devices embedded in everyday objects, enabling them to send and receive data”

Wearable payments like smartwatches will simplify transactions, and while this is a sector that is in early development, expert analysis suggests change is coming – and retailers are advised to be ready.

As a report from Park Associated explains, smartwatches have largely been used for fitness tracking and notifications, but mobile payments via smartwatches are an emerging trend, and as consumers become more comfortable in making payments this way, the greater the role wearable payments are likely to play.

Wearable payments aren’t expected to catch on just yet, but by 2020 they could be a key part of mobile transactions and help to take m-commerce from strength to strength in the future.

Making Mobile Payments more Secure

Research has indicated just how important mobile commerce is becoming. 60 percent of those surveyed agree that “mobile money enhances the shopping experience” and 50 percent say that mobile money drives loyalty to their financial institution or online merchant. However, if mobile commerce is going to outperform e-commerce, then there is one major barrier that needs to be overcome: the public perception of security risks.

Figures from NTT Data show 75 percent of consumers say that guarantees against fraud would accelerate their use of mobile payments, however, less than half of businesses have such a guarantee in place/or plan to have one in the future.

And regarding perceptions of fraud risk, the views of retailers and consumers differ considerably. NTT Data’s survey shows over half of shoppers feel mobile transactions are a less secure option, but 60 percent of executives felt mobile will help to develop their businesses, “because it is safe”.

The NTT Data survey is not the only one to have picked up on consumers’ concerns over mobile payment security, and if mobile payments are to continue to gain traction in the way many predict, and ultimately take over from e-commerce, addressing these worries is essential.


With the ever-increasing use of smartphones and mobile devices, mobile commerce, or m-commerce, looks set to take over from e-commerce.

Over time, consumers will become more comfortable with mobile purchases and the Internet of Things, and Fintech innovations will make mobile payments easier and more accessible. When this happens, m-commerce is likely to overtake e-commerce as our preferred way of shopping online.