By Andrew Reszka, Regional Head APAC
Smartwatch hovering and mobile app tapping – payments are increasingly made and authorised seamlessly in the blink of an eye. This mobile wallet technology in action is the next de facto payment and e-commerce standard. While the Australian market has been somewhat slower in its adoption of mobile wallet technologies, Canstar Blue’s latest survey found that nearly one in four Australians check their mobile banking app every single day. Further to this, more than 75 per cent of face-to-face payments in Australia are ‘tap and go’, indicating that digital convenience is in high demand and bound to converge on Australia sooner rather than later.
It’s clear that customers crave the simplicity and convenience. Not only that, merchants can also appreciate the ease of payment for customers without ever tapping on a keyboard. Most institutions in Australia have now jumped on board, and the majority of banks have compatible cards for at least one digital wallet.
With mobile wallets now here to stay, now’s the time to learn the facts and get ready for the next big wave in omni-channel payments.
What is a mobile wallet?
A mobile wallet is an app that stores your credit card or debit card details, allowing customers to make contactless payments using their smartphone, as well as conducting their checkout for online shopping simpler and faster. It’s a digital payment with no physical wallet involved.
For example, an in-store purchase can be carried out by a customer hovering their smart device over the payment terminal, which is then authenticated and authorised. There’s no need to enter payment details, and the transaction also facilitates the easy transfer of store offers and loyalty points directly to the digital device.
Customers are drawn to mobile wallets for one primary reason: convenience. However, customer experience inevitably extends beyond the simple transfer of funds. Merchants also need to be aware of delivering on this convenience by supporting a wide range of mobile wallet options, such as PayPal, Samsung Pay or Apple Pay.
It’s also important to remember that mobile wallets can include digital coupons, gift cards, digital tickets (for events or transportation), identity cards such as digital passports, and digital access keys for buildings and homes.
Leveraging the mobile wallet
The support of mobile wallets puts Australian merchants in a strong position to capitalise on the growing m-commerce and CNP markets. Customers want seamless and frictionless payment options, and mobile wallets deliver on this.
One of the invisible benefits of mobile wallets for merchants is that the technologies embedded in them actually reduce overall fraud risk. Not only is this a big plus for the merchant because it reduces the costs of fraud, but customers can also adopt a form of payment that is both easy to use and secure.
Merchants are presented with a strong opportunity to leverage the benefits of mobile wallets by providing a consistent omni-channel m-commerce experience – for example, by taking advantage of the built-in convenience this payment technology allows for ease of connection between mobile wallets, apps, digital gift cards, and loyalty programs. By offering an app and website with the same look-and-feel, customers become automatically more comfortable with the payment process.
Preventing fraud on mobile wallets
Mobile wallet technology is inherently more secure than other payment options. This is the result of built-in tokenisation that supports instant authorisation and authentication in milliseconds.
Tokenisation replaces sensitive account and card information with a non-sensitive numerical ‘token’. This is used as an identifier during the payment process and can only be traced back to the original account or card data with a master key. This keeps the entire tokenisation process both secure and easy to use for customers and merchants alike.
Tokenisation can be used to secure mobile wallet and m-commerce payments. While the process cannot guarantee merchants will be protected from security breaches, it does guarantee that vital customer data is protected in the event of security breach, reducing instances of fraud as it is more difficult for fraudsters to attain personal payment information.
Mobile wallets are the next frontier of payment options for merchants and customers in Australia. Not only is it seamless and convenient, it is also more secure. Nevertheless, tokenisation cannot provide complete protection from fraudsters, so it’s important to remember that a move to mobile wallets is not a license to avoid fraud protection. The bottom line is that mobile wallets will revolutionise the way payments are made – still, it’s important to be prepared.
Contact us today to learn more about how merchants can implement a multi-layered fraud protection solution that provides extended protection beyond tokenisation.