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Mobile Payment Adoption Is Slow – And Here’s Why

Dec 21, 2015, Categories: Blog, News

mobile-pay Mobile payment services are commonly available, but a lot of people actively avoid utilizing this feature due to data privacy concerns. People fear that they will become victims of identity theft, fraud, or their privacy will be breached if they use mobile payment systems. Inside Secure, a global leader in providing embedded security solutions for mobile and other connected devices, reports that a survey of 1217 American consumers conducted by Research Now, shows that 17% of respondents who did not pay for holiday purchases with their mobile devices, plan to use services such as Android Pay, Samsung Pay, Apple Pay, or a proprietary service that is enabled on their bank card. This counts as a significant leap from similar figures in the previous year.

The popularity of mobile payment services is growing during the holiday season, but people who abstain from using mobile payment services cite concerns about payment fraud, identity theft, and data privacy.

The Executive Vice President of Inside Secure USA, Trevor Daughney, has highlighted the importance of educating consumers. He said that it is the industry’s responsibility to ensure that the consumer is aware of the payment security measures. He explained that it is vital to resolve these security concerns. While outlining a strategy for achieving this, he says that financial institutions such as banks need to communicate the message of security clearly to their customers. Furthermore, the customers should be educated on how banks handle their data, for instance, the bank’s procedures of keeping payment separate from the other data on the mobile device, what type of data is stored locally on the device, etc.

A large majority of people (70%) who are not planning to make a holiday purchase over their phone, state that the threat of identity theft stops them from using the available in-store mobile payment apps. And about 71% have said that their primary concern is that their transaction data might not remain private.

Almost 40% of the people surveyed said that they plan on paying for their in-store holiday purchases with their mobile devices. This trend is rising because last year, the percentage was only 33%. Among these 40%, male respondents are in the majority (53%) compared to just 47% of the women. Mobile payments are more popular among the 18-44 age group. The survey shows that almost 64% of respondents who plan to use smartphones at point-of-sale terminals are aged between 18-44 years, whereas this number decreases to 33% in the 45+ years group.

The survey further reported that people who use iOS are more likely to use mobile payments during this holiday season. In addition, the percentage is 45% which is quite high as compared to Android users since only 26% of them say that will make a mobile payment.

Daughney further added that mobile payment apps are going to become widespread. The main reason behind this is that banks and other card issuing entities want to enhance their relationships with present customers, gain visibility for their respective brands, and at the same time, get quick access to transaction data. Mobile apps will allow banks and other institutions to directly interact with their customers in a quick and convenient manner. However, this has not been possible in the past.

 

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