Mobile Payment Apps: Quick, Easy…Safe?

Every single day the world seems to get a little smaller as another aspect of our complex lives gets optimized for the phone screen.

From typing and clicking to swiping and tapping, everything is being transformed into a convenient, snappy app so one may never find themselves more than arm’s reach from any service under the sun.

Now, thanks to social distancing and contactless payments, this transformation has extended to one of the most vital parts of our lives – our wallets.

In 2020, mobile payment apps have never been more popular. What started as a niche feature that few payment systems supported, and even fewer trusted, has now become mainstream. Phrases like “What’s your Venmo?” have become as ubiquitous as “Let’s grab an Uber.” While store signs with the Apple Pay logo have become the new “American Express Accepted Here” stickers.

With more and more people opting for mobile payment apps in their personal lives, we have begun to ask ourselves, why not bring them into our business lives? Recognizing the convenience and value that mobile payments offer their business, B2B suppliers, through electronic invoicing

and payment solutions, have smartly begun to offer mobile payment options as a means to minimizing friction and accelerating cash flow.

This revolution in how we pay, however, has raised the question, how safe is it? After all, it’s one thing to let an app access your contact list, but it’s something else entirely to open up access to our entire bank account—checking, credit, savings and all.

Like with most things in life, these tools are only as effective as the person wielding it. When used properly, mobile payment apps can be a quick, convenient, and secure method of moving money between family, friends, and businesses. When not taken seriously, though, these tools can cause a lot of trouble and pain, like a hammer striking the thumb of an inattentive carpenter.

The Mobile Payment Revolution

According to NerdWallet, nearly 80% of Americans today are using mobile payment apps. That’s higher than the number of Americans who use Facebook (which is only 69% according to the Pew Research Center). In other words, the average American is more likely to have (and use) a payment app on their phone than the little blue button for the world’s biggest social media platform.

This number is growing, too—not just in the US, but around the world. According to Mordor Intelligence, B2B businesses are heading toward mobile at a rate that is expected to grow even more in 2020 and beyond, rising at a growth rate of nearly 30% between 2020 and 2025. Indeed, by 2026, the global B2B payment transaction market is expected to reach around $63,084 billion, according to Acumen Research Consulting. Among this, digital and mobile transaction types are expected to contribute significantly. Thanks to the global pandemic, the use of these apps is skyrocketing along with new accounts being made as more and more people look for ways to stay safe and contact-free.

Take India, for example, where mobile payment apps are on track to overtake credit card usage, according to the S&P in their 2020 India Mobile Payments Market Report. The country already had high payment app usage, with Google Pay and the country-specific PhonePe making up over 7 billion transactions just between those two platforms. Now, with COVID, the usage numbers have jumped 10% between pre-pandemic days.

Meanwhile, back in the U.S., an executive at Fiserv noted that they have seen a massive jump in peer to peer transactions over mobile apps. Research from NACHA and the Credit Research Foundation, published in June 2017, concluded that A/R professionals should expect the use of checks to decline to 34% as more companies migrate to digital B2B payment methods. What has been a steady adoption over the previous three years has spiked to a new user growth of 19% and transaction growth of 9%.

Mobile payments aren’t just for B2C anymore, automation is bringing the convenience of mobile payments to B2B companies.

The B2B payment process can be complicated and laborious. Between the stacks of invoices, multiple checks, and mountains of paper, it can take weeks and cost businesses hundreds of dollars to process payments. Using mobile payments allows B2B businesses to receive payments faster.

With all this new adoption, malicious actors are taking notice. After all, to them, more users mean more opportunities. So, how can the general public use these mobile payment apps safely and securely?

Safeguarding your Money

The risk with using these payment apps falls into two broad categories—theft of personal information and good old fashioned scams. When the proper precautions are taken, though, users can confidently utilize these apps and reap all the benefits of convenience while minimizing the risk.

Personal Information Theft

It does not take much to steal a person’s identity. A birthdate, an email address, a weak password, small vulnerabilities, and bits of innocuous information can quickly compound, resulting in unauthorized access to personal accounts.

The data on one’s phone is only as secure as the phone itself. Anyone planning to conduct financial business on their device should be ensuring they have security features set up, such as strong passcodes and two-factor authentication. One should also take care to avoid downloading apps that are not trusted or vetted by the phone vendor and not to open email attachments unless the sender is known and trusted. Keeping the phone up to date with the latest bug fixes and patches from the manufacturer is also vital.

Finally, only access banking data over a secure, encrypted connection. Nearly every reputable banking app will use encryption by default, but you can further protect yourself by not sending money over public Wi-Fi networks.

Security features and practices can sometimes add a little hassle, but the payoff in preventing data theft—especially when a device has access to banking data—is invaluable.

Avoiding Mobile Payment Scams

One thing that many users fail to realize is that mobile payment apps might not protect you from accidental or fraudulent purchases the way a bank might. An accidental purchase using a credit card at a store can often be remedied fairly easily. If the store does not offer a refund, the odds are the credit card company will.

With peer-to-peer payment apps, however, if you mistype a username or add an extra zero to your payment, resolving the issue is a matter of trust between you and the recipient. Always double-check the user info and payment amount to ensure you are paying the right person the right amount of money. Sending money to a stranger who happens to have the same name as a friend might result in you never seeing that cash again.

Finally, make sure you trust the person you are sending money to. That can be easy when you know the person, but if you are making a purchase to a stranger, consider using apps that explicitly offer buyer protection such as PayPal. Peer-to-peer apps like Zelle and Venmo are really only designed for friends and family and have little obligation to help you if the seller you buy from turns out to be a fraud.

When used properly, mobile payment apps not only provide convenience, but can even be more secure than cards. For example, telling someone your app username or phone number is far less risky than handing your credit card to a seller who can write down whatever information they want when you aren’t looking.

With the proper precautions, you can rest easy using mobile payment systems. After all, it often feels like cash rules everything around us in today’s society, so don’t miss out on the opportunity to offer mobile payments. Choose an A/R solution that provides your customers with a safe and quick way to send payments and pay their bills.

With mobile options

You have the advantage of fast and easy payments, and you can pass these advantages on to your customer.

Convenience and ease of use go a long way in helping you and your customers stay on top of your busy lives– your customers and your A/R department will thank you for it!