September 3, 2015
There’s an exciting movement erupting among mobile payment platforms. There is the rise of Apple Pay and Google Wallet, and the anticipated launch of Samsung Pay and Android Pay. With some of the most recognizable companies in the world investing in contactless payment technology, one would think contactless payments are the trend at the terminal.
At the point-of-sale, customers are almost always asked, How would you like to pay? So what has been the response? According a Gallup report, only 13% of US adults with a smartphone have a digital wallet on their device, and 76% of those who have a digital wallet have never used it or have almost never used it to make a purchase from a retailer in the past 30 days. This lackadaisical consumer behavior towards the adoption of contactless payments gives merchants less of an incentive to upgrade to NFC-compatible (near field communication) POS systems.
Customers are going to have to be excited by digital wallet providers if they want a share in the market. Digital wallet providers will have to invest resources in consumer engagement and providing information that will alleviate consumer concerns. The report reflects specific barriers in the way; security concerns (hacking, losing the phone, etc.) account for 55% of why consumers are unlikely to adopt using a digital wallet.
Either not enough consumers know or they don’t trust that their financial data will be secure. Though some mobile payment providers may differ in the security technology used, there is an emphasis on security being the top priority.
Apple Pay: Simply suspend Apple Pay by placing your device in Lost Mode using Find My iPhone instead of immediately canceling your cards.
Google Wallet: Fraud Protection covers 100% of verified unauthorized Google Wallet transactions in the US.
Samsung Pay (release date - Sep. 28, 2015): Makes transactions super easy — Swipe. Secure. Hover. Pay. And it’s safe; your purchases remain yours alone; Samsung Pay doesn’t store or share your payment information, so you can pay without worry.
Android Pay (not yet released): Google will be taking what's become standard measures for mobile payments, including tokenized card numbers for secure one-time transactions. Android Pay will work over NFC, and will eventually support biometric security measures (such as fingerprint scanning).
For a win-win outcome, merchants are going to have to adopt contactless payments. Eighty-two percent of merchants agree that contactless payments will boost their business, stating reasons such as increased customer convenience, speed and revenue, according to a survey conducted by ShopKeep. Businesses that can see the positive impact of accepting contactless payments are more likely to engage with customers using this payment method.
There are still many merchants with wavering opinions. Investing in a contactless POS terminal is an added cost and oftentimes introducing another system to employees can be cumbersome.
The mobile movement in still in full gear; only time will tell if or when contactless payments will be less of a mobile feature and more of a payment preference.