How will cryptocurrency affect the mobile payment market?

Cryptocurrencies, like Bitcoin, have the potential to change how people pay for goods and services.

How Will Cryptocurrency Affect The Mobile PaymentMarket?

Cryptocurrencies, like Bitcoin, have the potential to change how people pay for goods and services. Find out how here.

The currency we use today has taken various forms over the centuries. From grains to metals and coins to cash, the world has come along way in using advanced mediums to trade and transact business. Change in value is inevitable, and even the underlying currency that defines and decides the value of commodities has been evolving. It’s good to be aware of cryptocurrency to stay updated about the changing times. It has emerged as a new medium for exchange and will inevitably affect the global markets with time.  

Along with the evolution of currency, the modes of payment also keep changing. As you know, transactions through mobile devices have become then or now, and global mobile payment is expected to grow annually at 37.8%(from 2018 to 2026). You must be wondering how the cryptocurrency would affect the mobile payment market. It’s a fascinating subject to analyze, indeed! Let’s have a look.

(ImageSource: Pixabay)

Why Cryptocurrency?

Cryptocurrency is a digital currency for digital transactions, which mainly involve transactions done over the internet. And Blockchain is a set of technologies that build the foundation for cryptocurrency’s functioning. It drives it forward through the concepts of decentralization, privacy, and verification, with which you will soon get acquainted in the following sections. Below given are the reasons why cryptocurrency promises to be the future of digital payment:

  • Secure: Cryptocurrency     is one of the safest currencies in a world where physical money is always     under the threat of theft. The buyer and the seller in a cryptocurrency transaction     have the ledger’s copy that records all transactions. Thus, cryptocurrency is     entirely safe against malicious intrusions. 
  • Decentralized: You must be familiar with how a bank operates.     However, cryptocurrency’s nature is such that it removes any central body’s     need to govern or regulate the transactions. Unlike conventional banking, no     single authority controls the cryptocurrency network, and the only parties involved in     the transaction are the buyer and the seller.
  • Faster Transaction Speed: Any transaction in any part of the world can happen     at higher speeds, thus increasing cryptocurrency’s efficiency. Thanks to Blockchain technology,     which is the digital framework on which cryptocurrency works,  cross-border transactions across the     globe can be swift, usually done within seconds.
  • Versatile: Again, unlike banks, cryptocurrency transactions can be entirely     private as no authorized third party controls or regulates your money.     Thus, there is no need to reveal any sensitive information to anyone. The     transaction charges are also meager as compared to traditional mediums. What’s     more, you can also use them anywhere without the fear of devaluation or     inflation.

How Cryptocurrency Is Different From Regular Money

There isa sea of differences between cryptocurrency and regular currency. Here are the main ones.

  • Anonymous: Cryptocurrencies offer complete and absolute anonymity to     parties involved in a transaction. Your usual currency transactions are     regulated by banks and regulators that track your financial activities for     each money transaction or card-swipe. Cryptocurrencies do not hold your information     unless you choose to do so.
  • Decentralized: With cryptocurrencies, no bank has any control or a say in how you     carry out transactions. And due to the absence of central power, there are     lower transaction charges or maintenance fees involved. 
  • Not Legal Tender: Cryptocurrencies     are not backed by any government as such and are not legal tender. In     regular money or fiat currencies, the government controls much of the     supply, and you have to pay taxes. 
  • Fraud-proof: Cryptocurrencies are     entirely secure as the parties' transaction details and identities are     encrypted for record-keeping. Transactions recorded in a public ledger are     held by both the buyer and the seller.

How Cryptocurrency IsUsed

Though we talked so far about cryptocurrency as a form ofcurrency, many people don't use it as a currency for transactions. Instead, cryptocurrency as an investmentis one of its primary uses. Thus, it becomes a useful tool for your portfoliomanagement. Any cryptocurrencyholder can manage their wealth without many limitations. As cryptocurrenciesare finite, their value increases as they mature. This increase in valueprovides an excellent opportunity for investors to earn good returns over time.Cryptocurrency is ideal for medium to long-term investment. Several lessvolatile cryptocurrenciesoffer a significant offset to inflation. They are a great commodity againsttraditional investment tools and reduce devaluation caused by the decliningvalue of money. 

Today, various services over the internet and online shoppingestablishments accept cryptocurrency. Major online gaming platforms are nowincorporating cryptocurrencyinto their gaming systems. Some cryptocurrencies are explicitly established for online gaming andentertainment, such as GameCredits, Funfair & Enjin. They offer fastertransaction times and reduced volatility.  

You can trade goods and services for cryptocurrencies. You can also trade one cryptocurrency for another.Foreign exchanges, goods & services, and other commodities can also beexchanged for cryptocurrencies. However,there are tax implications in places where cryptocurrencies are legalized. Thus, you mightowe tax on capital gains from cryptocurrencies if you reside in such jurisdictions.

Current Problems With The Mobile Payments Market

You must be using mobile payment platforms today for varioustransactions and payments regularly. However, the mode of payment has manydrawbacks and pitfalls, as discussed below.

·     Expensive And Delayed Overseas Payments: One of the significant problems with the mobile payments market iscross-border payments which have long delays and are costly. The inability ofcentralized infrastructures necessitates independent infrastructures, which canbe an expensive alternative for overseas mobile payments.

·     Fraud: Fraud inpayment networks increase with the rise of mobile payments in e-commerce. Even withfingerprint and biometric verification, there are vulnerabilities in mobile payment methods thatemerge from time to time, which need to be addressed. 

·     Third-party Risks: The dependence of mobile payments on third-party infrastructure increases unwantedparticipants’ involvement in a single transaction. The more the number of thirdparties, the higher the regulations and restrictions for various banks and regions.  

·     Security: Mobilephone payments function on a wide range of operating systems and handsetsthemselves. Older software versions may not have robust and advanced securityfeatures. Such lapses and obsolete devices may threaten mobile payment safety.If you use an older model mobile, you must have already faced many issues.

How BitcoinCould Solve These Problems

Bitcoin is the pioneer and the most widespread cryptocurrency that promises to solve manyof the hurdles in mobilepayments. Gradually, we will get to see more and more mobilepayment platforms starting to integrate with cryptocurrencies such as Bitcoin. Recent examples includeApplePay, GooglePay & Samsung Pay. 

The major hurdle in mobile payments is security. As mentioned earlier, Bitcoin is based on blockchain technology,which is a highly secure framework and is responsible for revolutionarytransformations in cybersecurity. It has been instrumental in preventing scams,online frauds, or malicious interference, thanks to its solid foundation builton robust blockchain technology. Mobile wallets are also set to get securewith multi-signature through Blockchain.Furthermore, as cryptocurrencytransactions happen between the buyer and the seller eliminating anythird-parties, no external-source risk exists in such transactions.  

Similarly,transactions are pretty fast in Bitcoindueto Blockchain. This speed is set to grow with more developments in fasternetworks. Funds you send could be easily accessible within seconds in acompletely different part of the world. And since there is no centralregulatory authority for cryptocurrency transactions, there are no unnecessaryfees involved.

Crypto Mobile Payment As An Alternative To The Credit Card

You might be using a credit card regularly. However, Crytpo Mobile Paymentsand Crypto cards maynow overtake credit cards due to the lack of public trust in financialinstitutions. Furthermore, millions ofcredit cards getting compromised by malicious actors are not news anymore. Breaches of such magnitudescreate apprehensions among people about the security and governance of creditcards. 

Cryptocurrencies are decentralized. Hence, there is no involvement of anyfinancial regulatory body. And since financial independence is the latestrevolution in finance, it is getting wide acceptance as more people want tocontrol their money. Thus cryptocurrencies grant financial freedom, security, andreliability as they are not affected by inflation, regulations, or fiscalpolicy changes.

Summary

By now, you are clear that cryptocurrency is one of the latest in a trend ofmultiple disruptions in various sectors of the modern world. Also, you areaware that mobile payments have too many concerns, unaddressed issues, andsecurity loopholes. Cryptocurrencypromises to solve them, mostly with its inherent characteristics themselves, toprovide secure, fast, and convenient transactions to anyone. With therapid growth in global mobile users and online fraud, this is the right timefor Bitcoin andother cryptocurrenciesto be used in conventional mobilepayment methods. 

References:

1.     TransparencyMarket Research, Mobile Payment Technologies Market, https://www.transparencymarketresearch.com/report-toc/157 

2.     TatianaWalk-Morris, Apple Pay to accept Bitcoinvia BitPay cards, https://www.retaildive.com/news/apple-pay-to-accept-bitcoin-via-bitpay-cards/595123/  

3.     PranobMehrotra, Google Pay, and Samsung Paywill soon let you pay with Bitcoin and other cryptocurrencies,

https://www.xda-developers.com/google-pay-samsung-pay-cryptocurrency/

4.     Kaustav,How Ripple (XRP) Outdid the TransactionSpeed of VISA, https://globalcoinreport.com/how-ripple-xrp-outdid-the-transaction-speed-of-visa/

5.     JustinasBaltrusaitis, Blockchain TransactionTimes vs. Money Transfers: Blockchain Continues to Dominate,

https://learnbonds.com/news/blockchain-transaction-times-vs-money-transfers-blockchain-continues-to-dominate/ 

6.     IDTheft Resource Center, 2020 Annual Data Breach Report, http://www.idtheftcenter.org/data-breaches.html