mobile payment, smartphone

5G May Mean a Huge Change for Mobile Payments, Banking and Beyond

May 16, 2019         By: Steven Anderson

If you’ve been following mobile technology for any length of time, you know that 5G represents one of the biggest changes the new millennium has seen yet. While there’s been a lot made of several of its potential impacts, Forbes recently offered up a report suggesting that 5G may also mean big changes for mobile payments, mobile banking, and beyond.

One of the biggest changes that 5G was likely to bring, according to the report, is that the training wheels would finally come off. With 5G connectivity, users will be able to buy a car directly from a mobile interface—application, credit check, financing offers and so on—start to finish. The same applies for home loans.

Additionally, Forbes cites improved transaction speed and personalized offers as the basis for 5G leading to the ultimate mobile payments state: the end of the physical wallet. With around 20 percent of senior millennials having already overthrown cash for mobile payments, such a plan may not be out of line.

Finally, Forbes also projects more accuracy in fraud prevention and improved security. The increased amount of data accessible in real time will help improve the odds that fraud will be caught; after all, with 5G, geolocation for every transaction becomes possible. Plus, patches and other security updates can fly by, and without direct intervention from the user, who often had to install patches directly.

Forbes’ assessment is reasonable, but it misses some key points. For instance, the “replace the wallet” notion; you can pretty readily replace the cash with mobile payments, but what about the wallet’s other functions, like ID storage? Sure, the self-driving car may take care of that point, and 5G will have a big hand in that, but still, in the short term, ID will demand a wallet and prudence will demand a bit of cash in there in case of network outages. Additionally, if purchase capability gets ramped up to the degree Forbes describes, it may actually scare some users off due to the newly-heightened stakes involved for fraud.

Still, Forbes has raised interesting points. 5G may not be the panacea it’s projecting for mobile payments, but it’s certainly going to add its own special twist to the field.