Consumers Fear Mobile Payments Security Flaws Fiserv
Telecommunication network providers may seem like banks' competition in the mobile payments arms race, but a look at initiatives around the world shows that collaboration between the two groups is the wisest course.September 26
Banks, credit card networks and technology companies like Google could be wasting money on developing mobile wallets and other smartphone payment systems. A Lightspeed Research survey found that the ability to make mobile payments is "very unimportant" to about half of credit card customers with smartphones.September 21
CHICAGO — Mobile-payment projects could falter if consumers continue to believe the payment option is unsafe to use at the point of sale, industry members said at a conference on Sept. 26.
"The whole growth of the payment system is built on [consumer adoption]," Rahul Gupta, president of card services for Fiserv Inc., told attendees during a panel discussion at the Federal Reserve Bank of Chicago's one-day payments symposium.
"We see a big trust issue, and that is leading to adoption barriers," he said, adding that consumer adoption will determine the success of mobile payments.
Fiserv's internal research suggests consumers think of mobile banking and payments as a safety issue, Gupta said. "If the consumer takes a pass on mobile, we're all in trouble financially."
Recent survey data from Lightspeed Research indicate consumers consider the ability to make payments with a mobile phone "very unimportant."
To counter such perceptions, every entity involved in the mobile-payments system must work to boost consumer confidence in mobile payments, Gupta said.
Other conference panelists at the symposium agreed that consumers will adopt payment schemes they consider safe.
PayPal Inc., Amazon.com Inc. and Google Inc. show users how they protect member information, and consumers "flock to them," Michael Keresman, president of Cardinal Commerce Corp., told attendees.
Robert Carr, CEO and chairman of Heartland Payment Systems Inc., said the security of mobile phones are as good as anything in the market.
"A cell phone [has the capability] to do encryption properly," Carr said. "Any security issues with the cell phone are definitely manageable."