Mobile devices are playing an increasingly important role in commerce. For now, they're frequently used as browsing tools for reviews and price comparisons in stores, or to complete online transactions. But with multiple companies developing smartphone-based payment systems, the day will soon come where they also purchase items in brick-and-mortar locations. 

In Australia, Commonwealth Bank customers are already benefiting from smartphone-based, contactless, mobile-based payments, according to The Australian. Throughout the past year, the number of mobile transactions performed through the bank's app have multiplied sixfold, and most of its members login through their smartphone (56 percent) rather than their desktops. To meet consumer demand, the institution revamped the application. 

"We've worked a lot with customers to design a simplified, easy to use interface with a number of shortcuts that they were looking for," Commonwealth Bank executive general manager digital channels, Lisa Frazier told The Australian. 

Retailer Coles will also be launching its own system that uses 5,000 mobile phone tags for its Australian customers. The Australian highlighted that contactless payments have increased by more than 70 percent in the past year. 

However, the introduction of the technology was rocky at first. Commonwealth Bank admitted that it should have done more to educate merchants and consumers about the technology, and that both groups weren't always sure of how the payments worked or how secure they were, ZDNet recently reported. Merchants that originally prided themselves on finishing transactions under a minute found that explaining how the system works was slowing down their operation, although they eventually overcame this problem. 

"Then you had people asking whether we were going to scam them while they were using it, am I going to get ripped off," Kristie Atkins director of sales at Amalgamated Holdings Limited, told the source. "But now we have gotten over that little hill [contactless] is a dream for us."

Educate customers about mobile payment options
To ensure that similar technology is accepted throughout other regions of the globe, financial institutions, retailers and other organizations planning to use mobile payments should strive to educate their customers about the security of their systems and how they will work. Data and identity theft are two prime concerns that will need to be addressed, so strong authentication methods must be integrated into the apps. This is important for merchants as well, to avoid fraud and shrinkage. Commonwealth Bank emphasized that trust is a critical part to developing a stronger relationship with customers, and improved security tools can assist with that. 

While quelling security concerns was one of Commonwealth Bank's goals in creating widespread acceptance of its app, the institution also stressed that mobile wallets must provide value to their customers. They need to be easy to use, and should provide a number of different transaction options to their users. Otherwise, consumers can just use their credit or debit cards. But as smartphones possess greater functionality than plastic, they can benefit people with online payment features, money transfers and other capabilities that take advantage of the devices' versatility. 

The technology has taken off in Australia, ZDNet noted. However, the country also has the infrastructure in place to support it. Implementing the necessary support structure will be another step in popularizing mobile payments. While that country has already experienced a boom in smartphone-based transactions, Corinne Ng, vice president and general manager at American Express International, stated that moving to a new system will take time and require further investment from businesses.