Americans didn’t exactly rush to adopt contactless payments from the get-go. But, if worldwide trends are anything to go by, that could soon change.
Globally, at least, the influence of contactless payments is on the rise. Recently released research projects that contactless payments will be worth more than $1 trillion in 2018 — a year sooner than anticipated. In two years, overall transactions made via in-store contactless payments will account for 15 percent of point-of-sale transaction volume, worth $2 trillion.
The surge in use underpins growth in interest among financial institutions and technology companies to advance adoption of contactless payments. One recent effort comes from Beam Wallet, which is preparing to launch a mobile payment solution that uses blockchain tech, which is intended to provide more secure and speedy retail payments. Meanwhile, Alipay is continuing its expansion and made recent moves to increase its presence in Singapore and Spain. Singapore-based merchants using SCash’s WIZZ platform will now be able to offer Alipay as a payment option, due to a recent integration. Meanwhile, in Spain, Banco Sabadell is enabling merchants to accept Alipay through its mPOS app and other POS solutions.
Growth in adoption of contactless payments comes against increase in risk of fraud.
Recently, major exploitable weaknesses were found to affect a number of popular mobile card readers. The issues, reported by Positive Technologies security experts, enable dishonest merchants to take advantage of customers — for instance, by secretly changing the payment amount displayed on the card reader in order to overcharge customers, or falsely stating that the payment was declined in order to prompt the customer to pay twice.
The issues affect readers from vendors including PayPal, Square, iZettle and SumUp. Researchers advised consumers to protect themselves by avoiding paying with magstripe on an mPOS device and instead choose more secure payment methods such as chip-and-PIN, chip-and-signature or contactless.
Threats like these, as well as efforts from FIs and merchants to accept mobile wallet payments, could be a sign of changing payment preferences.
Find out more about how QSRs are adapting to evolving mPOS technology here.