09/10/2024 | Press release | Distributed by Public on 09/10/2024 07:43
Flipping payment norms upside down
"Mobile payment" refers to a process in which the user's mobile terminal (smartphone or connected watch) acts as the payment medium. Today, two main technologies coexist, with contrasting global dynamics:
According to a report by Grand View Research, the mobile payment market is estimated to be worth USD 52.21 billion in 2023 and to reach USD 905 billion by 2028. This dramatic evolution is underpinned both by consumption habits and a strengthening mobile-pay ecosystem. While mobile payment was initially brought into popular use by Apple Pay, a variety of providers have released e-wallets in recent years. Samsung and Google, plus internet giants like Amazon, PayPal, Meta and Alibaba, have since entered the ring. Distributors such as US retailer Walmart and other supermarket chains like Carrefour in France are also creating their own services. Local solutions, such as Pix in Brazil, additionally offer a wide range of features, from B2C transactions to peer-to-peer transfers.
Moreover, the regulators are ensuring the market keeps opening up. In Europe, the Digital Markets Act thus aims to prevent major digital companies from abusing their market power, notably in terms of payment services.
In this context, after a long regulatory battle, Apple has finally committed to allow competition to access the in NFC chip of its iPhones, meaning that EU users would be able to install other e-wallets than Apple Pay on their iOS devices. The Cupertino firm is facing a similar class action in the US, which will probably redefine the balance of power in the mobile payment landscape.
Still, consumers are hesitant to go all in on 100% virtual payment. Debit and credit cards have been the standard for decades - a norm which won't disappear overnight. Even more influential is the concern for security. Some users worry about their finances falling into the wrong hands when they lose their phones. Others fear for their data being stored or misused.
Contrary to these anxieties, mobile payment is typically safer than a physical card. While a stolen card can be used without a PIN code, smartphones require either codes or advanced biometrics for access. As for data, unique digital tokens are created with each transaction, keeping consumer data anonymous for providers like Apple and Google.
Edenred, pioneering and championing the mobile payment experience
With effective education, users stand to gain greater security and simplicity from mobile payment solutions. From the start, it's been our priority at Edenred to offer users cutting-edge features based in state-of-the-art technology and a safe, user-friendly experience.
As one of the first players to launch on the Apple Pay platform, Edenred has a long track record in mobile payment excellence. Thanks to our early entry into the sector, we have a key advantage in terms of coverage, offering some 46 programs in 26 countries. Edenred supports both NFC and QR codes and works at the local level to develop mobile payment options. Our goal is to provide solutions that meet the specific technical and cultural needs of a country, region or city. Our belief in the power of mobile payment is so strong that we are offering "plasticless" solutions (i.e. 100% mobile by design) in an ever-growing number of countries.
While Edenred is best known for its meal benefits solutions, we are taking mobile payment way beyond food. For example, in Mobility, our multi-energy solutions enable drivers in Latin America to pay automatically by flashing a QR code displayed on the terminal at fueling stations. In Taiwan, our Ticket Xpress solution relies on QR code-based digital vouchers. These features are just the beginning of our journey to offer efficient and convenient on-the-go innovation.
In all, 25 million mobile transactions were made with Edenred solutions in 2021 - a number that has doubled every year to reach 100 million in 2023. And while rising consumption is a factor, the growth of mobile is outpacing other digital payment methods. In 2023, mobile transactions were up 25% compared to card transactions.
More connectivity, security and simplicity
We are now going the extra mile to support more fluid payment processes. One of our achievements in this domain is our complementary payment service. Many of our lunch benefits solutions are loaded with a set amount of money for maximum daily use. For instances in which a user needs to pay beyond that limit, our split payment feature is able to automatically charge excess costs to their bank card. This enables users to take advantage of their employee benefits while making an unlimited purchase, in one single seamless digital transaction.
The near future holds endless virtual payment possibilities. Thanks to advances in biometrics, industries are experimenting with authentication via hands or eyes. Artificial intelligence (AI) is also enhancing security by assessing risk based on activity history and the location from where someone is accessing a smartphone. These developments all speak to desires for a smooth, hassle-free payment experience. Increased education on the strengths of mobile payment is an essential next step for integrating solutions that offer greater control, simplicity and connectivity.