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Global online payment processing company Adyen sees that number still growing as more people get 4G phones

Internal data released today by global online payment processing company Adyen said that mobile devices facilitated 34 per cent of global online transactions completed through its systems in Q4 2015 — the highest percentage the company has ever seen.

Asia, as a region, was in line with the global average and companies like JCB, UnionPay and AliPay were clear world leaders as compared with other private corporations.

For Japanese credit card company JCB, over half (54 per cent) of payments were made via mobile. AliPay, the payment arm of Chinese e-commerce giant Alibaba, saw 44 per cent of customers use mobile devices (a nine per cent jump from 2014). UnionPay also enjoyed a large year-on-year jump by processing 31 per cent mobile payments compared with 22 per cent, last year.

“Merchants that have created a frictionless mobile checkout experience are driving repeat traffic, especially in Asia where many consumers are increasingly shopping online through a mobile device,” said Warren Hayashi, President of Adyen Asia Pacific, in the report.

Adyen is an end-to-end infrastructure company which develops payment solutions for companies. It has some serious clients in the Internet world — Facebook, Uber, Netflix, AirBnB, Dropbox and Evernote to name a few. It also claims Visa, MasterCard and Vodafone as more traditional clients.

While the report does not extend beyond the Adyen system, the Dutch company is influential and the report highlights why banks, startups and financial institutions are all moving to catch a mobile payment wave which has been on a swell for awhile.

4G has arrived, as exemplified by India

One interesting factor which may further facilitate mobile payments is the growing traction of phones with 4G capabilities.

An International Data Corporation report from December 22 said that more than half of the 9.3 million phones shipped to India in October 2015 had 4G capabilities — signalling a growing faith amongst vendors that the upgraded phones will sell.

More 4G phones on the market means better technology and an increased likelihood the user will experiment, and maybe adopt, mobile-based commerce.

Also Read: Find out which mobile trends will take off in 2016

Smartphones outpacing tablets…sort of

It is no real surprise that most mobile sales would be facilitated using a smartphone. It is a simple numbers game. According to the statistics portal Statistica, 31.3  per cent of the global population is expected to own a smartphone in 2016, as compared with 15.7 per cent for tablets.

That data supports common sense. If a person can only afford one or the other, smartphones are more convenient than tablets to everyday life.

The Adyen data says 68 per cent of all mobile transactions were done on smartphones versus 32 per cent on tablets.

However, if we dive deeper, the numbers reveal some nuance.

In the retail industry, smartphones finally surpassed tablets as the purchasing tool of choice in Q4, but not by much. Around 17.5 per cent of online retail purchases were made on smartphones, compared with 16 per cent on tablets. In Q3 2015, more people (17 per cent) used tablets than smartphones (14 per cent).

Also Read: Malaysians view mobile videos primarily at home: Survey

Also, the average price per checkout from tablets is still higher than that of the smartphone and the average purchase on an iPad was higher than that of a desktop. The iPad average was US$107 versus the US$106 spent on the average desktop transaction.

Both Android phones and the iPhone lagged in average purchase price at US$73 and US$83 respectively. The average amount spent via an Android tablet was US$86.

Security concerns

In a separate report also released today, the online security company Gemalto released a survey of 3,700 IT professionals and found over half (54 per cent) of respondents had a security breach involving payment data. Also, the average number of intrusions over a 24-month period was four.

Seventy-two per cent of respondents said they believe new payment methods are putting security at risk and over half of those people (54 per cent) were unsure about their company’s ability to prevent attacks.

Finally, 55 per cent of respondents did not know where their payment data was stored or located.

“These independent research findings should be a wake-up call for business leaders…The financial fallout from data breaches and the damages to corporate reputation and customer relationships will carry even greater potential risk as newer payment methods gain adoption,” said Jean-Francois Schreiber, Senior VP for Identity, Data and Software Services at Gemalto, in a statement.

Also Read: The rise of mobile web: It’s not about just apps anymore!

The Gemalto study highlighted the prediction that the rate of e-wallet, mobile and contactless payments will double over the next two years and it seems data security has not kept pace with the booming technology.

“Looking forward, as companies move to accept newer payment methods, their own confidence in their ability to protect that data is not strong. The majority of respondents felt protection of payment data wasn’t a top priority at their companies, and that the resources, technologies and personnel in place are insufficient… It is clearly critical for companies to look for and invest in solutions to close these data protection gaps, expeditiously,” concluded Schreiber.

In future, the competition for dominance in the mobile payment facilitation department looks fierce. However, if Gemalto is correct with its findings, mobile payment data security could be a point of opportunity.

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