• by Jack Loechner , Staff Writer, January 21, 2014

The Harris Poll of 2,383 adults wonders if after holiday shopping, or ordering a drink at your favorite coffee shop, you settle the bill with a simple tap of your smartphone against the merchant's point-of-service terminal. The technology is already here, albeit at an emerging level, says the report about the poll findings.

13% of Americans indicate that they have either paid in this manner themselves (4%) or witnessed it firsthand (8%), with predictably stronger experience levels among smartphone owners (18%, 7% and 11%, respectively).

Americans feel that this is just the first indicator of a fundamental shift in how they are likely to pay for goods and services in the years to come, with over six in ten indicating that they believe smartphone payments will eventually replace both payment card (66%) and cash (61%) transactions for a majority of purchases.

While many Americans perceive this change in payment culture is a likely eventuality, considerably fewer appear to perceive it as imminent: although 66% believe smartphone payments will eventually replace payment card transactions, only 32% believe this will happen in less than five years. Similarly, though 61% of Americans believe smartphone payments will eventually replace cash for the majority of purchases, only 26% think this will happen in less than five years.

Expected Time When Smartphone Payments Will Replace Cards/Cash For Majority Of Purchases (Base: All U.S. adults; % of Group)
	Total	Smartphone Users
Payment Card Transactions
Ever	66%	76%
In less than 5 years	32	38
Within the next year	2	2
1 year to less than 3 years	12	14
3 years to less than 5 years	19	21
5 years to less than 10 years	19	21
10 years or more	15	17
Never	34	24
Cash Transactions
Ever	61	70
In less than 5 years	26	31
Within the next year	2	2
1 year to less than 3 years	9	12
3 years to less than 5 years	16	18
5 years to less than 10 years	18	21
10 years or more	17	18
Never	39	30
Source: Harris Interactive, January 2014

Despite the majority of Americans indicating that such changes to our collective purchasing habits are ahead, few display a strong interest in replacing their own cash or card transactions with the a smartphone. Although 27% of Americans, and 44% of smartphone users report overall interest in being able to use their smartphone to process in-person payments, far fewer specify being veryinterested in doing so (8% and 16%, respectively). Nonetheless, interest levels point to some segments which are most interested overall in this ability:

• Echo Boomers (40%) and Gen Xers (34%), display considerably stronger interest in doing so than either Baby Boomers (18%) or Matures (7%)
• 32% of men are significantly more interested in this technology than women (22%)
• 38% of those in households with children also display considerably stronger overall interest than those in households with none (22%)

Among those who indicate being either not very or not at all interested in being able to make smartphone payments, security is a clear factor. 51% say they don't want to store sensitive information on their phone, and 40% don't want to transmit sensitive information to a merchant's device. Another impediment is the simple matter of smartphone ownership, with 50% indicating they are not interested in doing so because they don't use a smartphone. The other top impediment speaks to a deeper issue facing the mobile payment industry. 52% of those not interested indicate that they simply don't see any reason to switch from cash or payment cards.

• Looking specifically at smartphone owners not interested in using their devices to process payments, 68% don't want to store sensitive information on their phones, 51% don't want to transmit sensitive information to the merchant's device, and 62% don't see any reason at all to switch

While 28% of Americans, and 40% of smartphone owners indicate that, being able to make mobile payments while still taking advantage of their existing credit card reward programs, would make them more interested in doing so, only 9% and 15% respectively, specify that they would be much more interested. Moreover, only 1% of those not interested in paying with smartphones indicate that this would make them much more so.

When asked how the ability to use their smartphones as a "digital wallet" with electronic versions of all the identifications, loyalty program cards and other documentation normally carried in a wallet, only 8% of Americans and 12% of smartphone owners indicate it would make them much more interested. Only 2% of those not interested in paying with smartphones overall indicate that this would make them much more interested.

Reason For Lack Of Interest In Using A Smartphone To Process Payments  (Multiple Response OK)
Reason	Total
Don't see any reason to switch from cash or payment cards	52%
Don't want to store sensitive information on my phone	51
Don't use a smartphone	50
Don't want to transmit sensitive information to the merchant's device	40
Worried that my smartphone might lose data service / connection (out of range, underground, etc.) and leave me unable to pay	25
Worried that my smartphone's battery will run out and leave me unable to pay	15
Don't understand how to use it	8
Don't know where I can use it	7
Something else	7
Source: Harris Interactive, January 2014

The report concludes by noting that when debit cards came to prominence, they did so by responding to a genuine consumer desire by combining the use-anywhere convenience of a credit card with the ability to draw from money in users' checking accounts instead of incurring debt. Thus far, the mobile payment industry has yet to find a similar "in" with consumers.

For additional information from Harris Interactive, please visit here.