Yankee Group's findings on the Mobile Payments points out that in the Payments space only 68% of prospects in USA are interested in making a transaction using mobile payments. In the past quarter only 14% have completed a transaction. The above numbers indicate that the interest versus actual usage.
14% of the consumers indicate that mobile payments are still in the emerging phase and will take time to win over other traditional payment methods. Some of the reasons why the mobile payments acceptance has been slow are due to the reasons listed below:
- Users have multiple alternatives of making payments, mostly in a B2C environment like paying through cash, debit cards, credit cards, etc.
- Security is still a major problem. Consumers consider mobile payments to be un-safe in comparison to other traditional payment methods.
- Not all merchants accept a mobile payment which has slowed down the mobile payments usage amongst the consumers.
- Consumers have to pay a small transaction fee to the mobile payment vendor on each transaction.
- Lack of education on how to use their phones to make a payment remains to be the most important factor which is hurting the adoption rate.
We have observed that the mobile payment vendors are coming up with some creative solutions which will speed up the adoption amongst the mobile users.
Mobile payment vendors are creating a mass appeal by rolling out mobile payment based offers which lure consumers to make their first mobile payment. Mobile payment vendors are also tying up loyalty and rewards simultaneously so as to ensure that the first time users of mobile payment systems keep using them and see a financial reward and the benefits in using a mobile payment system.
LTP View: A recent study by Accenture also highlights that there is a fair level of awareness amongst the American masses about Mobile based Payment systems, despite the awareness the adoption rate is slow. The report is in line with what we found out that the public is interested to adopt mobile payments systems if its usage is tied to some reward based system. Users who are already using the mobile payment system are expressing interest in using this new payment approach to buy gas as the gas stations. Interestingly, the people who are aware of the benefits of mobile based payment systems but have not yet adopted also show interest in buying gas through their smartphones.