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Innovation Mobile Payment Technologies: Opportunities and Challenges


7 min read

Market research forecasts that global mobile payments will grow to USD 75,412.89 million by 2027. Entailed by immense growth of the mobile user’s audience, mobile payments evolution highlights new ways of acquiring goods and services.

Global mobile payment technologies market outlook

Being profitable, comfortable, and easy-to-use mobile payment technologies innovate the fintech domain in many ways. In this article, I will get you through the most exciting notions, including the infamous BNPL, biometric, and contactless payments.

Innovations in Mobile Payment Technologies

The convenience and accessibility of mobile payment options have revolutionized how people pay for goods and services. From contactless payments to CBDC, the innovations in mobile payment technologies have opened up a whole new world of possibilities for consumers and businesses.

So, let’s take a closer look at the trends in mobile payment technologies and how innovations generally shape the market.


BNPL stands for buy-now-pay-later and implies a form of short-term delayed payment that allows customers to pay for their purchases later.

This payment model has become increasingly popular in recent years, particularly among younger consumers looking for a more flexible way to manage their finances.

Visual depiction of young BNPL users

BNPL services have disrupted the traditional credit card market by offering a more transparent and user-friendly way to borrow money. Hence, consumers can often see the total cost of a purchase upfront and avoid hidden fees and interest charges that are common with credit cards. This has made BNPL an attractive option for budget-conscious consumers who want to avoid high-interest debt.

Furthermore, BNPL services have also made it easier for merchants to sell their products by offering customers a more attractive payment option. Merchants can increase their conversion rates and reduce cart abandonment by providing more payment flexibility.

However, there are some concerns about BNPL services. Critics argue that they encourage consumers to spend beyond their means and can lead to financial problems if not used responsibly. Some countries have also started to regulate BNPL services to protect consumers from predatory lending practices. For example, the UK government plans to extend the scope of regulations to capture those BNPL firms that aren’t under the rules yet, and FCA is warning BNPL companies about using misleading adverts. The United States, in turn, also issued a document that made clear their plans for increasing the regulation of BNPL companies.


Blockchain technology has revolutionized the world of mobile payments by offering a secure and transparent way to make transactions. A blockchain is essentially a distributed ledger that records transactions securely and transparently. Each block in the chain contains a cryptographic hash of the previous block, ensuring that the data cannot be altered or tampered with.

This advanced security grants users confidence in their financial operations, but along with this comes the myths and misconceptions about blockchain. So, this is a two-way street. However, the statistics of blockchain successes look quite promising so far.

U.S. Cryptocurrency Payment Apps Market Size

One of the most significant benefits of blockchain technology is its ability to eliminate the need for intermediaries, such as banks and payment processors, to facilitate transactions. This reduces transaction costs and allows for faster, more efficient payments.

Blockchain also advances cryptographic techniques to secure transactions and data. Public key cryptography is used to authenticate participants and ensure that only the rightful owners can access and authorize transactions. Digital signatures verify the authenticity and integrity of data, preventing unauthorized modifications. Hash functions create unique identifiers for blocks and transactions, enabling quick verification and detection of tampering attempts.

In the context of mobile payments, blockchain technology has enabled the development of decentralized payment systems that anyone with a mobile device can use. These systems allow users to transfer funds directly to each other without needing a third-party intermediary.


Central bank digital currencies (CBDCs) are digital versions of fiat currencies that central banks back. The main objective of CBDCs is to provide a digital currency that can be used as an alternative to cash and other digital payment methods.

CBDCs have gained attention as central banks worldwide have started to explore their feasibility. CBDC stems from cryptocurrency’s concept, offering central banks a way to provide a digital currency backed by the government’s total credit.

And, of course, they can be used for mobile payments. CBDCs speed up and secure mobile payments without physical cash or credit cards.

Another benefit of CBDCs is that they can help reduce payment transaction costs, particularly for cross-border transfers.

Contactless payments

One of the critical benefits of contactless payments is their convenience. Consumers can quickly and easily pay for goods and services with a simple tap or wave of their phone. This is particularly useful when speed and efficiency are essential, such as at busy retail locations or when traveling on public transportation. It also was of immense help during the rise of COVID-19, and since then, contactless payments have only grown increasingly popular.

Contactless Payment Market Growth Since 2020 to 2030

Another advantage of contactless payments is their security. Because the payment information is transmitted through an encrypted signal, there is less risk of fraud or theft than traditional payment methods.

In addition, many mobile payment providers offer additional security features, such as fingerprint or facial recognition, to further protect user data.

Contactless payments also offer flexibility that traditional payment methods cannot match. With many different mobile payment providers and platforms available, consumers have a wide range of options for choosing the payment method that works best for them.

Biometric payments

Biometric payments allow consumers to make transactions using unique physiological or behavioral characteristics, such as fingerprints, facial recognition, or voice recognition. Their rise is often associated with contactless payments. Some even think this technology is disruptive as it has a higher transaction limit than NFC and can potentially replace it.

One of the critical benefits of biometric payments is their high level of security.

Because each user’s biometric data is unique and difficult to duplicate, it can provide a more secure authentication than traditional password-based methods.

Visual depiction of biometric payments card market CAGR in the US

With a simple scan of a fingerprint, face, or voice, consumers can quickly and easily make payments, eliminating the need to remember passwords or carry physical payment cards.

In addition to this, biometric payments also help tailor the payment experience to each user. Hence, this experience entails unmatched personalization.


AI can help automate and optimize payment processes, reduce transaction times, and enhance the overall payment experience for users.

It’s capable of analyzing vast amounts of data quickly and accurately. By processing user data, AI-powered payment systems can better understand consumer behavior and preferences, tailoring payment experiences to each user’s needs. This brings users a more personalized and intuitive payment experience, improving customer satisfaction and loyalty.

AI can also help improve payment security by detecting and preventing real-time fraudulent transactions. By analyzing user behavior and transaction data, AI-powered payment systems can identify suspicious patterns and alert businesses to potential fraud before it occurs.

Automation is but another benefit of this technology. By automating routine payment tasks, such as payment processing and reconciliation, AI-powered payment systems can reduce transaction times, lower costs, and improve overall payment efficiency. For example, virtual assistants like Amazon’s Alexa or Apple’s Siri can be integrated with payment systems, allowing users to initiate payments hands-free. Or take PayPal, a widely used digital payment platform. Its AI algorithms analyze transaction patterns, user behavior, and other data points to identify potentially fraudulent activities.

Opportunities for Mobile Payment Technologies

As I’ve mentioned before, innovative technologies in mobile payment create new opportunities for businesses to automate and streamline their processes, provide users with personalized and secure experiences, and improve the speed of transactions.

However, interestingly enough, as fintech becomes more global, businesses have more cross-border opportunities arising before them. For example, cross-border payment flow grew by 5% annually and reached $156 trillion in 2022.

This brings us to the next level of opportunity discussion; how does fintech evolve in each region?

FIntech Adoption by Region

As you can see from the graph above, Europe is leading in alternative financing and neobanking. This brings us to the idea that the region would greatly appreciate automation and security-related innovative solutions.

Meanwhile, Asia is rocking alternative lending, which screams BNPL has all means to skyrocket there.

However, the fintech market is highly innovative, and new ideas can change the overall dynamics of its evolution. So, before you tackle any innovation, start by researching your region and user needs.

Challenges of Mobile Payment Technologies

Many innovative technologies used in fintech are apt to fight security challenges. However, those challenges remain among financial technology’s most visible stepping stones.


Phishing is a technique used by cybercriminals to trick users into sharing sensitive information, such as usernames, passwords, and credit card numbers.

Phishing attacks can occur through email, social media, or text messages and can be challenging to detect. One way to fight them is by using biometric data to implement multi-factor authentication (MFA). This ensures exclusively authorized access to the users’ accounts.

Lost device

If a user’s mobile device is lost or stolen, an unauthorized person may be able to access sensitive payment information.

This challenge can be fought with advanced artificial intelligence, which can detect unusual patterns in customers’ behavior, such as using their devices in different geographical locations.

Weak passwords

If a user chooses a weak password, hackers can easily crack it, giving them access to sensitive payment information.

This can be fixed with passwordless authentication using biometric data. Using a fingerprint or face scan to authenticate a transaction, users can eliminate the risk of weak passwords. Another way is a two-factor authentication which doesn’t seem as innovative in 2023 but is still highly efficient.

Human error

Human error can also pose a security challenge in mobile payments. For example, a user may accidentally send a cost to the wrong recipient or enter incorrect payment information.

Payment confirmation technology can help in this case. It requires users to confirm the details of a payment before it is processed, ensuring that the payment is going to the correct recipient and that the payment information is accurate. This can help prevent accidental charges and provide a more secure payment experience.


Innovations don’t magically make your business successful, even though they can fight off some of the challenges you might face.

However, it’s important to stay vigilant when implementing something new and be sure that those solutions you pick out will improve your software rather than make it cumbersome.

I would be happy to assist you if you wish to have a consultation regarding innovative technologies for your mobile payment startup or business. Contact other DashDevs specialists or me to learn more about mobile payment innovations.

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