If you are familiar with the financial technology market, and mobile payments or wallet in particular you will know that 2015 is going to be a big year for the sector. The two most important smartphone brands globally have now declared their hands, with Apple Pay debuting in the US last October and Samsung Pay announced a few days ago via the Galaxy S6 at this week’s Mobile World Congress in Barcelona.
Apple Pay works on the iPhone 6 and looks like it has class leading user experience and security. Their approach of using a combination of fingerprint sensor Touch ID with tokenisation (where a unique 19 digit number is generated each time and transmitted to the retailer, rather than your actual card number) is believed by financial tech experts to be MUCH safer than using a regular chip & pin payment card. In fact, the only fly in the security ointment seems to be in the US where an under zealous vetting of the payment cards that are registered with Apple Pay has allowed some fraudulent activity by organised crime; the irony being that the criminals are then visiting bricks & mortar Apple Stores to buy desirable iPads, iPhones & MacBooks using Apple Pay with these registered – but stolen – payment cards!
The downside of the Apple Pay approach is the need for retailers to have contactless payment terminals installed. Ironically, although the US lags way behind the rest of the world in the adoption of chip & pin card technology (and so have much higher levels of card fraud) retailers there now have the incentive to jump straight to contactless terminals and potentially become more sophisticated.
Speaking of consumers, we recently conducted our third mobile wallet trust survey among UK smartphone owners. Preceded by a short explanation of what a mobile wallet could do, we asked which brands – if any – they would trust to deliver a mobile wallet app on a smartphone. Whilst almost a quarter of people said they wouldn’t trust any of these 15, the rest on average cited 4 of the brands below.
These figures have been extremely stable since our first survey in summer 2014 – not surprising since there is no ‘big hitter’ branded service available or advertising yet on the UK market, but that should change as Apple and Samsung start ramping up their offers in the UK in the next few months.
I am particularly interested in how Apple Pay will work on its Apple Watch, which is rumoured to be a mere two months away, as Apple starts dropping hints in the fashion media. I have read various research reports that suggest that consumers merely think of smartwatches as a smaller, less user friendly version of their smartphone, so only interesting to fashionistas if a beautiful, desirable device is launched. My belief is that in the medium term smartwatches could well become the natural device of choice through which to make mobile payments or operate your mobile wallet.
In the meantime, PayPal remains by far the most trusted wallet brand, no doubt thanks to its focused purpose in payments and the way it provides a buffer between the user’s card details and the 3rd party or retailer.
The most significant change since our second survey in November 2014 is the 5% fall in trust of ‘my own bank’. The almost endless scandals that have befallen the big banks operating in the UK have no doubt impacted on trust generally and contributed to this drop.
Our survey results do also prompt discussion around the (reasonably long standing if you follow this) topic of which sector is best suited to provide such a wallet service – financial or tech? I would argue that the two are inevitably becoming less distinguishable as specialists from each move into influential roles in the other’s sector. Indeed, our survey question is deliberately worded in such a way that ‘trust’ could be interpreted as a combination of ‘is the brand trustworthy?’ and ‘are they a credible provider?’
What do you think?
Samsung S6 image source: www.samsung.com/uk/galaxys6/
Apple Watch image source: www.apple.com/uk