Payments

NFC Payments face Adoption Hurdles in the U.K

MEDICI

NFC technology enabled payments have been a topic of discussion for sometime now. Earlier this year, many reports and analysts had predicted slow adoption of NFC as a payment enabling technology. That continues to be the case in the U.K.

Consumers in the UK have low awareness of NFC technology based payments according to a report by market research firm YuGov. The report states that only 35% of the adults in UK are aware of NFC enabled mobile phones. This figure has barely increased since YuGov’s previous study in September 2012 on the same topic.

Some of the key findings from the survey of 1051 adults:

  • Less than 9% of the smartphone owners in UK know that their device is NFC-enabled. Just over 22% of these have ever used their device to make payments.

  • Amongst the non-adopters of NFC, 56% do not believe the technology is safe to use. 53% of them are concerned about financial exposure should their phone be lost or stolen while 39% claim they do not see a need for the technology.

  • Awareness of contactless card technology however, grew from 55% to 70% of respondents from 2012 to September 2013. There was an increase increased from 16 percent to 25 percent in the respondents acknowledging ownership of a contactless card.

  • Use of contactless payment cards however was more limited, with only 40% owners ever using their contactless card.

  • 62% of the users want more places that accept contactless card payments.

"Despite the advances in NFC mobile technology, the industry has yet to increase the awareness nor put forth a compelling value proposition to the consumer to adopt NFC payments," says John Gilbert, consulting director at YouGov Technology & Telecoms. "In addition, retail adoption is rather limited, curbing the consumer's desire to transition."

According to Deloitte’s 3rd annual Global Mobile Consumer Survey, out of the 37,600 consumers surveyed in 20 countries, 10% know that they possess an NFC enabled phone. Of the 10% that know they have an NFC device, barely 34% have used it within the last month while 62% claim to have never used the capability.

Mobile Payments on the whole is set to explode in the U.K to reach $23.22 Bn in purchases via Mobile by 2018 according to a study conducted by Centre for Economic and Business Research. Systems that are not based on NFC technology, such as PayPal, are becoming more common. PayPal has managed to expose a number of people to mobile commerce without utilizing NFC technology. Consumers seem to prefer alternative methods to NFC due to the added security that they bring with them.

MEDICI Team

MEDICI

MEDICI Team is a group of content writers, bloggers, journalists, researchers, and editors from the MEDICI team who collaborate to create FinTech insights.

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