Can Mobile Wallet Providers Overcome Distrust?
The unveiling of GoogleWallet and a burst of other mobile payments initiatives this year have generated high hopes for phones replacing cash and credit cards at checkout. Software and hardware providers, card companies and marketers are tripping over themselves to play a part in the coming shift to near field communication (NFC)-powered mobile payments.
But as with many Next Big Things, whether the consumer actually wants or needs the new technology always seems to be an afterthought. In that vein, comparison-shopping site Retrevo has released new findings showing that 79% of people either didn't want a mobile wallet or didn't know what it or NFC was. Only 21% of the 1,000 U.S. consumers surveyed said they wanted to be able to pay for things in a store with their phones.
The 26% who said they didn't know what a mobile wallet was shows more consumer education on the topic is needed to help broaden adoption. Interest also splits along generational lines, with people 18 to 35 expressing much more openness to the technology than the vast majority (75%) of those 50 and over, who want nothing to do with mobile wallets.
Security and privacy concerns are shaping up as big obstacles. Nearly half of people who weren't interested in mobile wallets said they wouldn't trust any of the companies connected to the technology including major credit card providers, carriers and other prominent companies. At the bottom of that list were wireless carriers, which only 26% of those surveyed said they would trust to provide a mobile wallet.
Other companies didn't fare much better: Google (36%), Apple (33%), Visa, MasterCard or American Express (32%). Another issue for Google is that only 24% of Android phone owners said they want NFC-compatibility built into their next phone compared to 40% of iPhone owners, according to the study. But while Google partners are starting to build NFC chips into Android phones, the question of whether Apple will do with the next version of the iPhone is still unclear.
The upshot is that consumers aren't eagerly awaiting mobile wallets. If they catch on, it's going to have to be more the result of creating something people didn't know they needed before-something Apple is often credited with pulling off with its products.
For that approach to work, though, mobile payments will have to be faster, easier than swiping a bank card and offer more benefits in the form of special offers or discounts. Without having any security glitches. So the burden of getting people to buy into mobile wallets is squarely on the companies behind the m-payment ventures.