Today, mobile payment options are becoming increasingly sophisticated. The reason may be attributed to the continued evolution of new supporting technologies but, even with the attainment of such maturation of digital payments, their adoption remains minimal owing to several roadblocks. Security concerns top the list of such barriers.

Many updates highlight significant pains in the mobile payment market. Namely, despite the availability of wide range of options across the smartphone platforms, the usage is still rather low. Globally, 1 in 5 mobile subscribers use mobile payments at least occasionally but, more than 1 in 4 says that they do not have an intention of doing the same in future. More positively, 22 percent of mobile users don’t use this service but may think of doing so. The mobile payment reports reveal that the proportion of consumers having no intention of using mobile payments ranges from 24 per cent in India to 30 and 57 per cent in the Russia and US respectively.  These findings underline that the universal adoption of mobile wallets still faces challenges worldwide.

Security Issues

Data security is the biggest concern that many mobile payment consumers have associated with the concept of making payments via mobile applications. With payments handed over to the mobile processors, many consumers worry that their sensitive data could leak to some wrong hands. Another concern associated with such leakage is that it could bring forth a large amount of unwanted junk e-mails, spam, and promotions from companies that gain access to user lists. The other customers anticipate even graver consequences, like identity theft or unauthorized credit max-outs. However, most of the leading providers of mobile payment solutions have answered to all these concerns by adapting PCI encryption at 128-bit rate.

The latest technological implementation to mobile payments – HCE – an on-device technology allows a phone to perform card emulation on an NFC-enabled device. With HCE, the device does not have to rely on access to a secure element. This approach is particularly beneficial to the ones active in the NFC payments ecosystem.

Prior to the usage of HCE, Mobile payment credentials were stored on the mobile device inside the secure element. With HCE, the secure element can be present outside the mobile device. This increases security removing third-party involvement and, in turn, reduces both complexities and costs. The technology can help a mobile wallet application convert into a virtual smart card. In turn, this means direct communication between merchants and banks without any intermediaries, i.e. mobile network operators.

Payment Preferences

Many consumers voice disinterest in using smartphones for the purpose of making payments. After all, the act of swiping cards to complete payments is as easy and fast as the process of tapping smartphone apps for the very same purpose. This dilemma is answered for the businesses to offer more than just a payment means active via mobile apps; the businesses must also combine all other features of loyalty programs, in-store coupons, and redemptions into the mobile payment option.

No global Standard

International compatibility is another concern associated with mobile payments.  Until the definition of common interfaces, based on current standards the consumers will not engage in mobile payments properly. The consumers will see the benefits of using their smartphone as an electronic wallet only when that will allow them to conduct transactions than the basic traditional channels. Once a global standard is accepted, the consumers won’t require installing new software making a purchase every time; instead, they will be able to use any application for making payments. This will significantly simplify the purchasing process.

Future growth of mobile payments

The mobile payment adoption stats may not appear downright disappointing but it is to be accepted that the mobile payments are still in their early days. Despite these lingering concerns, the optimism for the bright future of mobile payments abounds. And thus, a growth of 210 percent in the total value of mobile payment transactions is anticipated in the year 2016 – up to 27.05 billion dollars from 8.71 billion dollars – it’s quite fair to wonder how this gap between the awareness and adoption of mobile payments will be closed?

Despite the potential and convenience that mobile payment solutions possess currently, there exists room for improvement. This is where the technological innovations arrive into the picture. These mobile payment innovations will include:

  • Peer-to-peer payments
  • Replacement of plastic cards
  • Centralized reward points
  • Replacement of physical banks by virtual ones

But, what about the biggest concern: Security?

With sensitive data stored in cloud databases, there is exists a very high-security standard set. In order to prevent unauthorized access latest technologies like HCE eliminate dependence on mobile operators. Payment providers can therefore create NFC-enabled applications without seeking permission from a mobile operator. It simplifies the overall payment process and enables a bank to directly interact with the card without network operators.

Beyond all these, new technologies can also lead to more interesting developments in the mobile payment industry. In the coming time, it may also let you trade assets with the same convenience as e-mails are traded today. This will eliminate the middlemen in the payment process. Biometrics as a payment option has already made its way. This can make mobile payments even more secure including everything from fingerprints, heartbeat and facial recognition as ways to verify payments.


Mobile payments are set to be the most revolutionary technology to sweep the retail world. Whatever be the hurdles that need to be tackled, it appears that the mobile payment options are certainly going to increase. By addressing, answering and solving the questions that have been raised by the consumers, the mobile payment companies will be able to downsize their hesitations.



Mahindra Comviva is the global leader of mobility solutions catering to The Business of Tomorrows. The company is a subsidiary of Tech Mahindra and a part of the $17.8 billion Mahindra Group. Its extensive...