Commentary

Mobile Payments Wait For Consumers; 59% Not Interested

There is a lot of money moving because of mobile -- but not all of it is where it was expected.

Only 21% of consumers who use the Internet expect to move to try mobile payments, according to a survey by Citi Cards.

In addition, a majority (59%) said they were very unlikely to start using a mobile payment app.

Other studies have shown that many shoppers would be just fine using their phones to pay in a store, and eMarketer estimates that location-based mobile payments in the U.S. will ramp up aggressively this year.

It is estimated that transaction value will triple this year due to a growing user base, broader merchant acceptance and the increasing frequency of consumers using their phones to make point-of-sale purchases on more expensive products.

So there may not be a lot more people, but there will be a lot more money flowing through mobile. One of the drivers of mobile payments should have been the shift to credit cards with chips, finally launched into the U.S. market late last year.

advertisement

advertisement

More than 70% of credit cards (94% of American Express cards) now contain the EMV chips, according to CardFlight, a mobile technology company involved with point of sales.

Any consumers who have to insert their cards into payment terminals have to recognize that the time the card is required to sit in the machine is a lot longer than the old credit card swipe. While slower than a credit card swipe, mobile payments can be a lot faster than waiting for a card chip to be read in a point-of-sale terminal.

Anyone using the Starbucks app for payments likely figured this out some time ago. Another factor that could drive mobile payment adoption is demographics.

The number of Millennials entering the workforce is accelerating, and 70% of adults from 18 to 34 years of age conducted some form of banking transaction over mobile last year, according to Mercator Advisory Group research. That compares to 31% of those 35 to 65 years of age.

In the Citi survey, more than 70% of consumers said paying with a smartphone should be as easy as texting.

Mobile payments are not quite there yet, at least for everybody with a smartphone. However, many who have become comfortable with paying with their smartphone are not likely to revert to older payment methods.

Now, if there were just more of them.

This column was originally published in MobileShopTalk on August 3, 2016.

 

 

 

 

Next story loading loading..