A new survey, conducted by Radius Global Market Research, shows that the majority of Americans remain quite skeptical of smartphone generated payment solutions and in the near-term, are not likely to give up traditional forms of payment, though the number of smartphone users has increased to nearly 50% of all U.S. consumers.
Chip Lister, Managing Director of Radius, says “... the benefits of convenience, speed, and portability, are resonating with a niche population of younger consumers... but... there are important obstacles that must be addressed before pay-by-smartphone technologies will be widely adopted... “
Half of all American consumers say potential security and fraud significantly influence their likelihood to use smartphone technology to make purchases in the future. In comparison, only 14% say security and fraud don’t influence their future likelihood to make those purchases.
The segment most likely to make purchases via smartphone, consumers under 35 and those identifying as digitally savvy, are also the most likely to be concerned with security and fraud issues. 54% of consumers under the age of 35 are concerned with fraud. That figure rises to 62% among digitally savvy consumers.
Lister says “... the more the consumers know about smartphone technology, the more they worry about the security of mobile transactions... marketers have done a good job at promoting convenience... (but) need to boost messaging efforts to address security concerns... (to) convince digitally savvy consumers...”
Several branded product and service providers are involved in executing a single smartphone generated transaction, complicating messaging efforts further. Responsibility for flawless delivery is spread across several partners.
Lister concludes that “Consumers appear to be very aware of the entire delivery chain associated with mobile payments... Individual brand reputations of retailers, device makers, software developers, service providers, and financial institutions will be scrutinized (by consumers)... In (their) minds the complete transaction is only as strong as the weakest link, especially as it relates to security... (and) consumers don’t currently view banks and credit card companies as leading the way in the effort to develop innovative payment technologies... “
For additional information about the study, please visit Radius global market research here.