Top Finance & Payment Trends of 2016

mobile wallet payment

The last year has brought so many changes to the financial aspect of business. Last year’s big push toward chip cards, presented a lot to work through to standardize this payment method. As you’re probably aware, these issues and tweaks are still being worked through. The end result will provide us with safer transactions and less identity theft.

This year, this sector of industry continues to thrive and grow. While chip card integration continues on, other technological abilities related to payment methods drive to the forefront. These all intertwine, though, and together, the future of payment seems brighter than ever.

credit card chip

Likely, you’re aware of mobile wallets. Mobile wallets, usually connected to your smart phone, provide users with the ability to pay directly from their device. Instead of bringing a card with you, simply tap your phone against the payment receiver. Your card information transfers. Businesses like Starbucks adopted this system years ago to speed up ordering for regular customers and card holders.

Mobile wallets haven’t taken off as expected, however. Frankly, it’s because businesses don’t want to spend the money to update the point of sale, or POS, systems. On the low end, these systems cost around $700. Consider that most stores allow for two cashiers to work at a time, this quickly becomes costly. As a result, store owners rapidly lost interest in these upgrades.

payment on phone

Flickr: Jason Howie

Upon its original release, consumers chose not to adopt this new technology. The value wasn’t there since so few stores offered it. This turned into a “chicken or the egg” problem. Stores keep their current POS systems because of a lack of interest in mobile wallets for the cost. Consumers don’t care about mobile wallets because stores don’t have the capability. The potential of this technology remained untapped while we circled in this continuous back and forth.

What is bringing mobile wallets to life is the chip card. By requiring chip card-reading capability, stores upgraded their POS systems. If they had to upgrade, business owners wanted a worthwhile investment. Many businesses chose to purchase payment receivers that read chip cards and allowed for mobile wallet compatibility. This allowed them to stay ahead of the curve. This increase in mobile wallet POS systems shows signs of more mobile wallet payments being made. In fact, a 210% growth in mobile payments is expected this year.