Americans slow to take up mobile payments

Posted: 12 December 2017 12:37 pm

Accessibility and security are the leading obstacles to consumers using digital wallets on their smartphones.

Mobile, cashless payments are meant to make life easier. So why are consumers so reluctant to modify their spending methods? A new study reveals that despite more Americans utilizing smartphones for some aspects of their shopping experience, financial security plays a significant role in dictating the payments landscape.

Market research company GFK’s 2017 FutureBuy Report found almost two fifths (39%) of U.S. consumers say that their mobile devices are fast becoming their “most important shopping tool”, compared to 28% in 2016.

The convenience and popularity of the smartphone is so profound that it was the leading device used by those shopping online last month for Black Friday deals, according to a recent consumer technology survey.
CNET reports smartphones made up a record-breaking 21% of online sales ($1.59 billion) on Cyber Monday.

However, just one quarter (25%) of U.S. shoppers made an in-store mobile payment in the last half of 2017.

So, why is marketplace adoption so slow? One apparent hurdle is availability.

GFK’s insights reference a recent JP Morgan Chase survey which suggests a little over one third (36%) of U.S. retailers currently accept mobile payments. However, GFK’s study insists accessibility is not the only issue.

Security is a big barrier. Considering the recent data breaches involving Equifax, Uber, Hilton, Forever 21 and the biggest data hack of all time at Yahoo are fresh on shoppers minds, the lack of interest is unsurprising.

The study found more than one third (36%) of Americans are concerned about their safety and security, while almost half (48%) feel it’s very important to actively manage their online identity and personal information.

One of the top ten concerns among Americans is their “personal information getting into the wrong hands”.

The anonymity of cash payments is popular. More than half (55%) of American households with an income of $75,000+ per year say they always or sometimes use cash for purchases as a way to protect their identities.

While cash rules everything around them and despite opposing research, Americans feel using EMV chips (70%) and swiping their cards (21%) when shopping are more secure forms of payment than a mobile wallet (4%).

The study identifies early adopters, influentials and passionate shoppers as Leading Edge Consumers (LECs). Just 15% of consumers surveyed were considered LECs. More than half of LECs (57%) say “making mobile payments with mobile devices is more secure than other methods”, compared to less than one quarter (23%) of the general public. Additionally, a similar proportion of LECs (58%) say they are “confident that their mobile device payments are 100% secure”, compared with a little over one fifth (23%) of the general public. More LEC consumers (50%) made more in-store mobile payments in the last six months than the general public (25%).

ACI Worldwide’s latest Global Report suggests mobile payments are increasing across the U.S. and Europe and are set to become even more widespread thanks to a global roll-out of more immediate payments schemes. The report found that mobile payments made through smartphones could replace everyday card transactions.

Technology is constantly enhancing the way we manage our finances. The leading US consumer watchdog agency stresses banks need to improve digital services and accessibility in order to better serve customers.

“There is enormous value in new technology that makes it feasible to enable consumers to exert more control over their credit cards, debit cards and other payment methods,” former CFPB boss Richard Cordray said.

In fact, a survey conducted by finder last year found more than half (57%) of Americans use a digital wallet more than any other means of transferring money, like an ATM, cash or bank check. These services allow transfers from one bank account to another, some without fees and some are even instantaneous transctions.

Compare a range of financial products and payment methods before deciding on your next credit or debit card.

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