Payment companies need to see mobile as the incumbent channel

Mobile phones are turning into an extension of our arms. If not having access to the internet makes you feel like you've traveled back to ancient times, forgetting your mobile phone at home has turned into the ultimate modern tragedy.

From contactless payments to electronic tickets and boarding passes, smartphones have triggered a whole new world of possibilities for traditional industries to jump onto the m-commerce bandwagon. The new decade will see Generation Z become adults, and they will expect more and more services and activities to be facilitated by their device of choice: mobile.

Leaving home in the morning means ensuring we’re carrying the vital three: wallet, keys, and cellphone. In this scenario, which includes adults spending an average of over 3.5 hours per day on their mobile phones, we can only expect to see more and more daily activities being facilitated by just reaching out to our smartphones — from making money transactions and getting food delivered, to booking doctor appointments and gym classes.

In the coming decade, we're leaving behind an era marked by e-commerce as the retail space’s key player. E-Commerce isn’t disappearing, but it is allowing m-commerce to take center stage. Even if the consumer decides to purchase items on the larger, more easily visible computer screen, they often begin the funnel process of browsing on a smartphone.

By 2021, m-commerce sales are expected to account for 54% of total e-commerce sales. Europe is currently leading the way with m-commerce: 67% of online shopping comes directly from mobile (compared to 59% in the U.S.) Mobile users downloaded 5.7 million retail apps in 2018, a 50% increase from 2015. The trend is not only taking a foothold in the U.S., though. South America, for example, is growing at an impressive pace and leads the world in m-commerce growth between 2018 and 2019, with a 36% increase.

If millennials embraced the internet and online shopping, Gen Z, the generation that succeeds them, is not only all about online shopping but also about the convenience of making any transaction through their mobile phones.

As a report by Google explains, "while millennials were mobile pioneers, teens are mobile natives." Born in or after 1995, this generation hasn’t lived in a world without the internet or mobile phones. Mobile is the number-one device they use — and they’re connected all the time.

According to the same report, Gen Z uses social media for consumption (and stalking) but not for sharing since it's not seen as "cool." For them, online shopping eliminates friction, and some of its benefits besides convenience and being faster than going to physical stores, include access to better deals, brands, and retailers without leaving home. Additionally, social media has created a persona for every brand, and Gen Z high hopes for the brands they choose.

From Nike to Xbox, they expect personalization, even when they make a purchase online. Influencer marketing appears to work the best, with 57% of Gen Z consumers making a purchase based on a media influencer. Again, the key player in this scenario is their mobile.