Two conflicting pieces of research into widespread use of mobile banking and mobile wallets have highlighted the continued debate as to whether it will be adopted by the mass consumer market.
While ICM Research casts doubt over the immediate use of mobile wallets in 2013, Juniper Research says over 1 billion mobile phone users will have made use of their mobile devices for banking purposes by the end of 2017.
Weve is the mobile joint venture between EE, O2 and Vodafone. Marketing director Tony Moretta is confident that by educating consumers, a lot of the concerns highlighted in ICM’s research would dissipate: ‘We’ll be seeing a joint education campaign with the card industry for the consumer.
‘We want to move it on from just a few sandwich shops using the technology in central London, to retail stores such as Tesco, Sainsbury’s, McDonald’s and Marks & Spencer.
‘At the moment contactless payment can only take £20 or less in one transaction – hence the sandwich and express shops. In terms of security, consumers will have some concerns and these can be assuaged by making sure consumer questions are properly answered. Weve is proposing to use Sim cards, which will almost provide a physical security measure.
‘Bank cards would be securely registered to a Sim, and could be easily killed off in the event of a lost phone.'
While consumer awareness is high at 80% and there is a potential willingness for its use, only 8% of people actually make contactless transactions, according to the ICM Research carried out in the run-up to Christmas. This suggests that the mobile wallet is very unlikely to take off this year.
ICM says the mobile wallet is still very much in its infancy – there’s a lack of retailer support, with few terminals and little or no in-store promotion.
It also adds that consumer security issues have still not been addressed – with people asking, ‘What if I lost my mobile?’ and ‘What happens when the phone’s battery runs out?’
Responses from consumers about security concerns, and their willingness to accept pin numbers and other measures that go against the somewhat casual ‘wave and pay’ ethos of contactless paying, highlight that there’s more work to be done to promote the mobile wallet than simply increasing smartphone penetration.
ICM also believes that brands aren’t doing enough to connect with customers using the mobile tools we know they are already comfortable with, particularly apps. In the run-up to Christmas, ICM found only one high street retailer using apps specifically designed to help with Christmas shopping – a real missed opportunity.
The research concludes that there simply aren’t enough NFC-enabled smartphones, so many people can’t yet make contactless payments by mobile even if they wanted to. A major barrier to take-up in 2013 is that smartphone users tend to be tied into long contracts, and people won’t break their contracts just to get an NFC-enabled device.
Jamie Belnikoff, associate director at ICM Research, who led the research, says: ‘The mobile wallet is about more than just paying: it allows consumers to manage their vouchers and discounts, loyalty cards, event tickets and public transport passes all in one place. While people appreciate these advantages, they expect a range of incentives and benefits to get them to pay this way. However, even with this encouragement, their genuine security concerns – and as we’ve seen in our recent research into contactless payments, the lack of terminals in shops and absence of in-store promotion – are also preventing take-up.
Dan Wagner, CEO of mobile payments company mPowa, says: ‘This revolution in payment technology is one that all companies can participate in. That means that everyone from large corporations to corner shops to sole traders must have access to electronic means of payment. For this to take place, the technology must become more affordable, accessible and future-proof.
‘As we have seen in the ICM report, much of the technology that is emerging – such as NFC – is still in its infancy, but one thing we are certain of is the fact that the credit card is, and will continue to be, the payment method of choice for many people for years to come. What technology developers must do is continue to make cards more functional and secure, while at the same time developing solutions that will enable cards to be used in many more situations. Developers working on alternatives to the credit card are still grappling for an industry.’
Author: Shujaul Azam