We use them in our daily lives without really asking questions, but how does it work? Who are the stakeholders? And can we really trust these means of payment?
What are paperless payments?
The dematerialized payment offered by some banks is an innovative movement that originated in Asian countries to simplify all financial transactions. It consists in making disappear the physical currency to support the creation of an electronic wallet thanks to its mobile phone, and then to pay with this one.
Although payment by bank card remains by far the preferred solution for French people for online purchases (11.2 billion payments in 2018), new means of payment, such as mobile, contactless payment (Apple Pay, Lydia ,) or PayPal, follow a promising development.
25% of French people choose PayPal as their preferred means of payment for shopping online.
In addition, the World Payment Report estimates that paperless payments will represent 725.8 billion transactions in 2020. Among the most common, we can cite:
- The credit card
- Mobile payment
- Contactless payment (NFC)
- Online payment
Note, however, that cryptocurrencies are also dematerialized means of payment which are developing in a significant way, but which are generally not usable in everyday life. A cryptocurrency holder will not be able to pay their physical trader through this (with rare exceptions). This is why it is preferable to favor the more conventional means of payment.
Mobile payment: how to pay with your smartphone?
Mobile payment or M-payment is a solution that allows you to use an everyday tool, here your mobile phone, to pay for your shopping or other. Convenient in case of forgetting your bank card, mobile payment can quickly become the most pleasant means of payment for users by its simplicity of use.
How to pay for purchases with a smartphone?
To use this technology, your mobile phone must have an NFC system and your bank must allow you to use this payment service. Almost all online banks offer this M-payment service. If you meet these two criteria, you are eligible for payment via mobile phone.
To use mobile payment, simply present your phone with the service application open, on the payment terminal which displays the pictogram of contactless payment. Unlike contactless payment via credit card, it is possible to pay higher amounts than the usual 20 or 30 euros. For example for Apple Pay, there is no specific limitation for payments made. The authorized amount will depend on the available ceiling of your bank card, knowing that some electronic payment terminals have a imposed limit of 300 €.
Apple Pay on iPhone and Apple Watch
Mobile payment is a dematerialized means of payment which is gaining momentum among the French population. One of the main players in this trend is Apple, with its service. Apple Pay launched in 2014 in the United States and only arrived in France in July 2016. Exclusively reserved for iPhone or Apple Watch users, Apple Pay has nevertheless managed to find its place in this sector and is positioned as one of the largest mobile payment services to date. It's a simple, secure and private way to pay in store, but also on applications and online. Everything is done completely securely in seconds. Just select Apple Pay during your purchase and finalize the payment with Face ID or Touch ID.
Google & Samsung Pay on Android
Google Pay, which arrived in France in December 2018, offers its service to all Android users. And finally, the last main player in M-payment, Samsung pay, which arrived in April 2018 to compete with Apple and Google. Samsung pay can be used on all Android phones and not only on Samsung devices. Other players, less known in this sector, are nevertheless inclined to become the main electronic wallets within five years, notably PayPal, Alipay and Wechat Pay. It is therefore a matter to follow closely.
What security do these services provide?
When we talk about paperless payments, the first fear of those questioned is piracy in the event of theft of a mobile phone which could put their savings at risk. To counter these apprehensions, the players who offer these payment solutions reassure their future users by always adding more elements to secure the data. With technologies like Face ID or fingerprint recognition, even in the event of theft of a mobile phone, bank accounts remain inaccessible to individuals not recognized by the application.
If you have lost your smartphone or your watch connected with your application on it, do not forget to report it to your bank, online or traditional. This will permanently block access to the application of this phone.