CINCINNATI-Consumers have high expectations for the future of mobile payments, but many aren't exactly sure what their own involvement will be.
A recent Vantiv survey of payment trends uncovered what the company says is a slight disconnect between consumer perceptions of mobile payments and their own level of participation. As a result, FIs need to pay greater attention to member mobile security concerns and differing consumer outlooks on the mobile space, the analysis suggests.
"It's kind of a paradox," said Lorena Harris, VP of corporate marketing and head of the Vantage insights program. "On one hand if you ask consumers, 66% today say they expect that many consumers will be using mobile payments regularly within five years. However ask them if they, themselves, expect to be using mobile payments regularly within that timeframe, and only 39% said yes."
Much of the lack of commitment, Vantiv research showed, stems from concerns with security of mobile transactions and with the uncertainty of what the mobile payments future will look like."
"Consumers hear a lot about fraud, and about 15% of them have experienced payments fraud themselves," said Harris. "So they worry about fraud, especially with the newness of mobile payments."
Consumers, too, added Harris, hear a lot of discussion around mobile payments but don't see a lot of substance yet, which makes some unsure of the future. "Consumers hear the talk but they really don't know what mobile payments will actually look like in the near future."
Age Group Differences
Breaking down the survey findings by age groups shows marked differences in perceptions. Fraud concerns and uncertainty about mobile's future are not as great with younger consumers, pointed out Harris. "Last year 71% of young adults (ages 18-34) thought smartphone payments would be common in five years, and this year that jumped significantly to 78%. So we see accelerating expectations from youth."
The confidence young adults are showing in mobile is also reflected in how they see themselves involved with e-payments. "Last year 56% of young adults said they thought they would be using mobile payments in five years and this year it's 58%--a big percentage," noted Harris.
Older consumers (ages 35-64), however, have less confidence, with 64% seeing e-payments becoming commonplace within five years, and only 35% seeing themselves using the payment option in the same timeframe.
Those 65 and older were least confident, with 51% seeing widespread mobile adoption in five years but only 15% of them actively involved.
What To Do?
What should credit unions do?
"We recommend they do not take a wait-and-see approach, that is very risky, and they may get left behind," said Harris. "We have a lot of white-label mobile offerings credit unions can use to see what their members grab onto. We also recommend they really emphasize security of the service when they come out with a mobile application-especially for the older groups. They are the ones most hung up on the security issues and not knowing that when mobile shows up whether it will be good."
Vantiv combined with Mercator Advisory Services on the survey of 1,200 people.
