Pros and Cons of Mobile Payments (2024)

FAQs

What are the pros and cons of mobile payment methods? ›

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.

When using mobile payments, credit cards are encrypted by the apps and locked thanks to the device's security features. This makes credit card fraud less likely to occur. In order to access mobile payments and the mobile wallet, customers have to unlock their devices using their set security features.

Mobile payments can be fast, easy to use, and require no physical contact, making them an attractive option for customers who want to make quick and hassle-free purchases.

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.

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.

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.

A study involving over 21,000 American adults revealed that mobile payment users had a 34% higher probability of exceeding their annual income compared to non-users【"】. 2. Financial Management Challenges: These users are also 31% more likely to face difficulties in managing their bills and expenses.

What are the disadvantages of cashless payments? ›

Identity theft and compromised personal information are potential dangers in a cashless economy, but privacy might be compromised in other ways too. When you pay digitally, you always leave a digital footprint, and this footprint is easily monitored by financial institutions.

In conclusion, virtual payments offer many advantages, including convenience, security, and reduced costs. However, there are several disadvantages to consider, such as technical issues, security risks, and limited consumer protection.

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.

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.

Identity theft is the most popular type of fraud associated with mobile payments. Criminals can effortlessly make purchases and access personal information on a lost or stolen smartphone, often without the consumer's knowledge.

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.