The mobile and financial industries are expecting us all to ditch our wallets full of cash and cards and start using mobile phones to pay in-store, but will mobile payment take off?
Our research suggests that consumers are expecting mobile payment – the combining of phone and payment system – to come, not least because every new phone they buy brings with it whole new capabilities. Awareness of existing mobile payment is also increasing, driven by gadget shows and contactless payments such as Oyster cards and Barclaycard.
As smartphones become intrinsically linked to consumers’ lives, owners tell us they are more likely to forget to take their wallets than their phones. So being able to swipe your mobile phone in order to pay is a logical solution.
However, there are barriers to uptake. Both cash and cards have unique benefits to consumers. While mobile payment straddles both, the perception is that it doesn’t have all the benefits of either. There are also security concerns around fraud and theft or loss of their phone.
To work, mobile payment also needs to be widely acceptable, but if the system is limited to smaller payments, fewer retailers may be prepared to invest. If higher transactions are allowed – a true debit-card-in-a phone – consumers and operators will expect pre-payment, PIN numbers and or restrictions on the value of spend, which tend to outweigh the key benefits of convenience and speed of transactions.
Changing the way we pay always involves a change in behaviour. Historically, direct debit, credit cards and Oyster all needed a carrot or stick for them to take off. So the banks will need to partner with retailers and technology companies to deliver it and give consumers the nudge they need.
In the meantime, if mobile payment comes along and is easy and trustworthy, then fine, but consumers aren’t that bothered…yet.
If you are interested in hearing more about the research, do get in touch!Subscribe