Realizing The Potential Of Mobile Payment

by CXOtoday News Desk    Mar 03, 2015

mobile

A new data by released by 451 Research shows that consumers are not adopting mobile payment. That’s indeed sad news for Apple Pay or Google Wallet. However, all’s not wrong in the mobile payment world, believe several others.

The research firm shows that there was little growth in the percentage of consumers likely to make mobile payments between 2013 and 2014, increasing just 2 percentage points from 22% to 24%. Despite the challenge, some of the Gartner and PwC research earlier showed that none can rule out the potential of mobile payment.

What’s ailing mobile payment?

The research finds out three key issues plaguing mobile payment adoption including lack of trust in secure digital storage, ease of use and lack of vendors offering digital payment options. For example, it shows 46% of consumers who say they’re unlikely to use mobile payment applications cite security issues as the primary reason.

At the same time, there is clearly a lack of clarity (on the part of the consumer) of how mobile payments work. Although some customers believe that mobile pay options are more secure than credit cards, it is still in such a nascent stage and the awareness level is so slow that consumers just do not bother adopting it. As the 451 Research report noted, in order for mass adoption to occur, both the consumers and retailers must make an effort.

A huge potential

Gartner predicts global mobile transaction market to be  worth $721 billion with more than 450 million users by 2017. Forrester put the numbers at $90bn. There is no doubt that mobile payment is still in its infancy in some countries like India, as concerns about security still persist. Despite the challenge, none can rule out the potential of mobile banking as it is being adopted across industries.

According to eminent tech researcher and professor in Electrical Engineering at IIT Chenna, Ashok Jhunjhunwala, Security will continue to be an issue as long as there is technological innovation. Once people start using mobile phones, they will understand that mobile payments are far safer than other means of transactions because they are traceable.

According to a PwC report, mobile payments are a win-win for both banks and service providers. The use of these devices will build customer loyalty, increase the amount of assets customers keep in accounts and open up new ways to serve customers. However, financial organizations need to consider some organizational changes that will enable them to play new roles and deliver new services in an open, collaborative, and fast-paced ecosystem. PwC says there are hurdles to mobile payments adoption, but innovative players will adapt, test, learn, and adopt.

Read: Mobile payment has a huge potential in India

As tech analyst Jack Wallen recommends that retailers who has yet to enable mobile pay on your Point Of Sale system ─ should do so immediately. “In other words, Apple and Google need to give retailers incentives to “flip the switch”. If Apple Pay and Google Wallet are to succeed, the options need to be present. Even the consumers that really want to get into the habit of grabbing their mobile device for payment can’t do so when retail shops haven’t made the option available,” he says.

Business Insider Intelligence also believes that once people adopt the behavior of paying their friends and family with their smartphone, the barrier to in-store mobile payments will be a lot less significant.