Nov 14, 2013 Dave King
Mobile payments are beginning to become more popular in the United States, and one of the biggest services that allows consumers to reserve restaurant tables online and from smartphones is set to launch a service that makes it possible for users to pay their bill with a phone.
OpenTable is currently in the development stage of its system, but is expected to launch it in San Francisco before the end of the year, according to Mobile Payments Live. The company does nearly half of its business through its mobile application, so there is no reason why the payment system won't be a success, especially with the majority of Americans owning a smartphone.
Consumers are using mobile payments
Businesses would be wise to follow OpenTable's lead with a mobile payment system, as many Americans are currently taking advantage of their smartphones to purchase goods and services. In fact, a recent survey from the Credit Union National Association (CUNA) found that more than half of consumers use their phones to make some type of payment.
However, 77.7 percent of respondents said they were concerned about security when completing transactions, so businesses will need to put a focus on keeping personal information secure when developing their payment platforms.
"The fact that the overwhelming majority of smartphone users listed security as a top concern is a reminder to financial institutions and others that offer mobile payments that users won't sacrifice convenience for security," said CUNA Executive Vice President Paul Gentile. "While there have been many advances made with mobile security in recent years, respondents' concerns over security indicate financial institutions and companies in the mobile space must continue to stress their focus on security with their customers."
What are the major risks associated with mobile payments?
Being able to pay with a mobile device is a great convenience for customers, but it is a service that also comes with numerous risks, including:
- Spyware and malware: With any mobile application comes the concern of spyware and malware. This allows a hacker to gain access to personal information that is entered on the app, which could lead to identity theft and other damaging situations, according to Cellum Mobile Pay.
- False payment requests: Without strong security protections, hackers may be able to prompt fraudulent payment requests to devices. As a result, consumers could be putting their personal information at risk.
Despite these security risks, when set up correctly, mobile payment systems can be beneficial for customers and businesses.