Pros and Cons of Mobile Payments (2024)

FAQs

What are the pros and cons of mobile payments? ›

Mobile payments can be convenient, fast and secure. They can, however, be expensive and still vulnerable to issues with technology. In particular, if there are any issues with the host phone, mobile payments will be unable to work at all.

Consumers both spent more money and made more purchases when tapping to pay. The researchers found that customers charged 9.4% more on average to their credit cards both online and in person after they started making mobile payments. They also made more purchases.

Mobile payments mostly use biometric identification, i.e. facial recognition or fingerprint, which makes it a very safe way to pay. In this case, no one but you can access the payment application.

This means that you may still need to carry physical cards or cash as a backup. Additionally, mobile payment apps rely heavily on technology, which can sometimes be a disadvantage. If your phone battery dies or you don't have access to an internet connection, you won't be able to make payments using the app.

They are more convenient than carrying cash or cards. They are faster than traditional methods like point-of-sale terminals or cheques. They are more secure than cash, as they can be PIN-protected and use tokenization.

Security Risks

Payment digitalization can make your customers' transactions vulnerable to cyber-attack and fraud when not implemented correctly. It may lead to data breaches, identity theft, and phishing attacks, which may cause huge losses for your business.

3. Better Payment Security. Digital payment systems use encryption and system authentication protocols, which minimise the risk of unauthorised access and effectively prevent fraud. Your financial information is protected, keeping you stress-free throughout the entire process of making digital payments.

Disadvantages of Electronic Payment System

Unauthorized transactions, stolen credentials, or fraudulent activities can occur, leading to financial losses for individuals and businesses. Privacy Concerns: Users may be concerned about the collection and storage of personal information by electronic payment providers.

And it might make spending money a little too easy for some people. In a recent paper based on data from a Chinese bank, researchers found that customers charged 9.4% more on average to their credit cards, through both online and in-person transactions, after they adopted a mobile payment method than they had before.

Why mobile payment is popular? ›

Here are a few of them: Convenience: Mobile payment eliminates the need to carry cash or physical payment cards. All that is required is a smartphone to make payments wherever it is accepted. Speed: Mobile payments are much faster than traditional cash transactions or even card payments.

Mobile payment platforms can provide credit, savings, wealth management, collection, investment, insurance, and other financial services, especially microcredit, effectively reduce the cost of financial services, expand the number of beneficiaries of financial services, and to a certain extent, play a role in financial ...

Mobile wallets secure a user's credit or debit card information through highly-advanced methods of encryption and tokenization. Encryption is a security feature that uses a secret key to ensure private information is only accessible to the sending and receiving parties.

Some challenges mobile payment systems face include a lack of interoperability between different platforms, potential network issues impacting user experience, security threats from hacking and data breaches, the need for customer education, and efforts required to onboard small merchants.

It can be a good way to borrow money to spread the cost of major purchases and comes with section 75 protection. But if you only make minimum payments or run up a bill you can't pay back they can be costly, making it easier to spend more than you can afford and could lead to debt.

Mobile wallets secure a user's credit or debit card information through highly-advanced methods of encryption and tokenization. Encryption is a security feature that uses a secret key to ensure private information is only accessible to the sending and receiving parties.

Mobile Payments are Safe

Mobile payments offer safety and security advantages over more traditional payment methods. Cash can be easily lost or stolen, and even cash counting errors can lead to imbalances in your cash drawer.