According to forecasts, next year will be a big one for mobile payments. Bluetooth-based MobilePay, already accepted for instance by some S-Group outlets, is gaining a foothold alongside the NFC-based payment apps and will be accepted by the Kesko chain from next year on.

We haven’t yet seen the true breakthrough of mobile payments, but studies say that every fifth Finn has already used their phone to pay at the counter. Up to half of Kesko’s customer base intends to try mobile payments if they get the chance.

Of the major banks operating in Finland, Google Pay has only been adopted by Nordea and DanskeBank to date, but Google is pursuing discussions with other banks. Google Pay could make mobile payments routine for a large user population, as Android has an almost 70 percent market share in Finland.

Phone manufacturers holding all the aces

The big telephone companies’ proprietary payment apps have an edge over the others: on iOS, only Apple Pay supports contactless payment, while Google Pay offers superior usability on Android. The use of fingerprint or facial recognition at the point of sale makes payments quicker and easier, and biometric authentication enables NFC payments for purchases over EUR 25.

However, the greatest benefits of mobile payments will be reaped in the digital channel, where buying has typically been awkward. You can expect your online store to support the mobile wallets of the major players, but the vendors probably won’t go to the trouble of integrating every single payment method offered by individual banks.

“Google Pay makes online buying quicker, since Google transmits the customer’s contact details directly to the merchant, so the customer won’t have to register with every store any more”, says Qvik’s Head of Design Matias Pietilä. “According to payment service provider Ayden’s price list, the vendors’ commissions are roughly equal for Google Pay and credit cards.”

Compared to Bluetooth-based apps, NFC applications are also easier to use. The user has to manually open and close the Bluetooth payment application at the counter, while NFC apps will automatically pop up for the transaction when you come close to the payment terminal.

The inevitable spread of mobile payments will improve security

Though the basic benefits offered by mobile payments are already widely understood, security issues still raise unnecessary concerns.

“Google Pay and Apple Pay are safer than ordinary NFC cards thanks to biometric authentication and the tokenization of card data, which means that it never leaves the device”, Pietilä says.

Tokenization is a method for authenticating the payment with a random number instead of the actual card details. The system generates a unique token for the card and transmits this digital card number to the merchant during the transaction instead of the actual credit card number. This keeps the original card safe and eliminates the need to cancel it even in case of theft. You just need to disable the mobile payment method for the stolen phone.

A phone is protected by fingerprint or facial recognition or a PIN, but if someone gets their hands on your wallet, the thief has instant access to your cash the cards with contactless payments.

Breakthrough is bound to happen, to some extent at least

A larger offering increases awareness of and interest in mobile payments. When Apple Pay was announced roughly a year ago, mobile payments were such a novel concept that Kauppalehti’s reporter had to personally go and buy a bottle of soda to see if the gimmick could actually work. “Seems to work”, wrote he in the headline.

Media coverage has evolved since, and readers no longer need explaining that you can use your phone to pay for things. Much can happen in a year, and 2019 could well be the one that breaks the dam for mobile payments.

“Many consumers now have access to a convenient mobile payment method. Stores have also invested in supporting mobile payments and are marketing the new methods to increase their utilization”, Pietilä says. “The use of customer loyalty cards, a big thing in Finland, is also becoming easier with mobile payments.“

The Finnish mobile payments field is still confusing, but at least there is a flavor for everyone now.

“It’s mostly a question of demand. Will consumers feel that mobile payments are convenient enough to switch over from what they’re using now?”