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How 5G Will Revolutionise Payments

BAMBORA OPINION

05 May 2021

5 minute read

As a merchant, you've probably wondered how 5G can benefit you. This article will explore the impact 5G is having on the mobile payment industry and how it will benefit consumers and businesses alike.

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5G has been around for a couple of years, and it continues to roll out in cities across Australia. Thousands of Australians are now able to connect to 5G at work and home, and the technology continues to change how we make mobile and online payments.

5G is a step up from 4G mobile, and it comes with a lot of upgrades. Most notably, 5G technology promises faster speeds, lower latency, and more reliable service. It's estimated that 5G speeds range from four to 20 gigabits per second.

If you don't yet have 5G, then you may not understand what all the fuss is about or how it can benefit you as a merchant. This article will explore the impact 5G is having on the mobile payment industry and how it will benefit both consumers and businesses.

HOW 5G WILL BENEFIT CONSUMERS

Our world is more connected that it's ever been, so it's necessary to constantly be improving mobile technology. 5G technology does just that - it impacts mobile usage in a variety of ways, leading to faster downloads, more functionality, and a better mobile experience overall.

5G will benefit consumers in a variety of ways, with the most obvious being faster speeds. If you're currently on a 4G network, you can download a 3GB movie in just 27 minutes. But with 5G, you could download that same movie in just 35 seconds. These speeds are roughly 100 times faster than the current 4G technology.

Plus, 5G towers have the capacity to support millions of devices. It's estimated that 5G will cover 40% of the world by 2024 and handle 25% of all mobile traffic. However, this kind of connectivity comes with a cost - some figures show it could cost between $130 and $150 billion to implement 5G.

THE 5G EXPERIENCE: IMPACT ON RETAIL

When you really get down to it, 5G is just a much faster version of 4G technology. But these faster speeds, when combined with lower latency, open up new opportunities for the retail industry. Let's look at a few examples of how this is the case.

Increased adoption of mobile shopping

Many consumers are still wary about visiting stores, which provides a huge incentive for most people to utilise mobile shopping even more than they already are. 5G has the ability to transform the mobile shopping experience, by providing a frictionless end-to-end shopping experience for customers.

5G allows retailers to create an interactive and engaging experience for customers before, during, and after the mobile shopping experience. And retailers can access valuable insights and data about their customers. This data can be used to create things like personalised shelf displays and product recommendations.

Better, more customised online experiences

5G will massively accelerate the use of immersive technologies, like augmented and virtual reality. Many larger retailers already use this technology, but more widespread adoption of 5G could make it more accessible to smaller businesses.

With 5G, retailers can create an immersive environment for their customers. For instance, if you sell furniture, you can use virtual reality to create a 3D model that customers can use to see how that furniture would look in their own home.

This can help retailers overcome some of the barriers to making online purchases. From researching, browsing, shopping, and all the way through to processing transactions, 5G will help make the process seamless and more customised.

The online supplier Wayfair already has a 3D model shoppers can use. Similarly IKEA shoppers can use a 3D room tool to see how furniture will look in their home.

Greater adoption of digital wallets

Data shows that consumers overwhelmingly prefer mobile payment technology over paying with cash. And 77% believe that mobile wallets are a more convenient way to pay than contactless payments.

Thanks to 5G, merchants can take advantage of faster data download speeds and offer digital wallets as a payment option if they didn't have them already.

Contactless payments and new payment experiences

Contactless payments were already in high demand, but they gained a lot of traction over the past year in response to the coronavirus pandemic. According to one report, there's been a 30% increase in contactless payments since the start of the pandemic.

Thanks to 5G, contactless payments should become much more widespread in the coming years. That's because 5G eliminates some of the most common connectivity issues during mobile payments.

5G helps minimise the time between when a consumer payment is made and when that transaction is confirmed. This increased speed and connectivity will significantly improve the customer experience, thus incentivising more to adopt contactless payments.

More secure transactions

Biometric authentication and facial recognition software are some of the best and most secure ways to verify a user's identity. That's because they utilise physical and behavioural characters of the individual.

However, both types of technology require large amounts of data. The faster speeds produced by 5G make it easier to utilise this technology, and we'll continue to see the use of other biometric signals grow with 5G, which will improve both the speed and security of mobile transactions.

Also, 5G requires that all signalling traffic uses encryption algorithms and secure keys to prevent interception. And its security measures can verify both the device and the network, which prevents any network interceptions.

5G CAN TAKE MOBILE COMMERCE TO NEW HEIGHTS

The past year has been turbulent for many retailers, but mobile commerce provides a way to rise above these ongoing challenges. Thanks to 5G technology and the improved mobile experience, omnichannel payment will continue to see massive growth in the coming years.

The lower latency and faster speeds allow businesses to deliver the value and convenience consumers are looking for, while still providing a higher security level. That's why all businesses should give serious consideration to 5G and mobile payments in 2021 - further reading: What's in Store for Payments in 2021.