The latest developments in the world of mobile phones and smartphones are 5G or fifth generation cellular network technology. Like the recent development of the WiFi 6 standard, this upgrade from 4G promises better mobile speed, reliability and capacity. Thanks to Massive MIMO (Multiple Input, Multiple Output) antennas, edge computing, smaller cells, beam forcing, and better WiFi for cellular convergence, 5G offers these benefits.

Mobile payments and digital wallets have seen tremendous development over the last few years. This is due to NFC technology’s higher penetration. FinTech vendors and, of course, growth in the use of smart phones as well. Not only in cities where we can use it for daily retail transactions like food or a cup of coffee, mobile payments are popular. Farmers in Africa and South Asia also use them to receive payments for agricultural goods.

Among the millennial generation, mobile payments are particularly popular.

Millennials have more readily accepted this technology than the older generations have been more cautious. After social media and weather, mobile banking apps are the third-most used on smart phones in the US. Mobile payments through their applications have also been included in social media applications such as WeChat Pay and Facebook Messenger Payments.

Some of the ways in which 5G could potentially affect the mobile payment industry are listed below.

1. One-to-one payments: Mobile payments and mobile banking are expected to grow rapidly worldwide, thanks to the ease of access they provide to regions outside the scope of traditional banking practises. Compared to the current 4G network, with 5G speeding up data up to 3 times, the overall consumer transaction experience will be improved, leading to more and more people relying on mobile payments. Even the exchange between friends of a minor sum of money. (Which was almost always an earlier cash transaction), via mobile phones will take place.
2. Retail Payments and Contact-less: Facilitated by digital technology, retailers can provide online and in-person customers with a smarter and more customised payment process. Consumers would be able to browse through online catalogues due to the high-speed connections. Then apply philtres, virtually select and even try their purchases, before you pay for them. Everything within a matter of minutes. This would lead to a further rise in online and retail payments.
3. Purchases of Big-Tickets: Long processes often required when buying big-ticket items such as cars or homes. This can take loan application processing, to credit check and finally loan activation and disbursement. To speed up the end-to-end experience, 5G would help banks combine user data and artificial intelligence in real time. High resolution streaming capabilities will allow customers to communicate with financial consultants before making any decisions, giving them more trust.
4. Extra Transaction Security: 5G will make it possible to use multi-modal bio-metric authentication features that rely on different physiological and/or behavioural characteristics of a person. For authentication, large amounts of bio-metric data are usually required. Then this information needs to be sent to matching engines that analyse patterns in this information.

5G will ensure that this information is uploaded faster, thus allowing for faster verification. Even when multiple factors for authentication are used. When wearable devices are used for mobile payments, bio-metric security is particularly required. Enhanced security may lead to an increase in the use of such mobile payment devices.

Overall, it is expected that the impact of 5G on mobile payments will be positive. Mobile payments and banking will take 5G to new heights. It will boost transaction speed, versatility and security, making mobile banking truly ubiquitous.