Banks and credit card companies are likeliest to succeed in mobile payments, contend business executives surveyed recently.
The KPMG global survey of nearly 1,000 executives in the financial services, technology, telecommunication and retail industries conducted during this year’s first quarter found that 73% of respondents believe mobile payments will be mainstream within four years compared with 9% who view them as mainstream today. Moreover, 46% believe mobile payments will be mainstream within two years.
“We believe that exploding smartphone growth and myriad opportunities will grow mobile payments at a much faster rate than our respondents anticipate,” Gary Matuszak, KPMG Global Chair of the Technology, Communication and Entertainment practice, said in a press release. “A wide variety of payments is ready for adoption, as several key players already provide or are rolling out mobile payments. And interest among consumers in utilizing mobile payments is growing, in line with the industry’s readiness to deploy them.”
Some 72% of the executives surveyed said mobile payments are now or will be reasonably important in the future, with mobile banking and Near Field Communication gaining significantly greater traction than today. And 58% said they have a mobile-payments strategy in place.
“While there is consensus about the significant value of this opportunity among executives across geographies and industries, the type and size of opportunity varies between developed and developing countries depending on depth and reach of the financial infrastructure in place,” said Matuszak. “We believe that those firms willing to engage in cross-industry partnerships and ‘coopetition’ are more likely to succeed and dominate the market due to the complex set of business relationships required to deliver mobile payments to a mass market.”
Asked about the benefits of a mobile-payment strategy, 81% of respondents believed convenience/accessibility is the highest attribute, followed by simplicity/ease of use at 73%, security at 57% and low cost at 43%.
At the same time, the participating business leaders, both globally and in the U.S., 71% viewed security as the main challenge to developing mobile-payment strategies. Technology and adoption of the technology followed at 61%, followed by cost at 37%.
“The business leaders understand that when it comes to consumers choosing a provider based on security, reputation can make the difference. And any damage to a business’ brand can prove costly, even to the extent of being a showstopper,” Sanjaya Krishna, KPMG U.S. Digital Services Leader in the TCE practice, said in the release. “As a result, leading businesses are adopting multiple approaches to alleviate customers’ privacy and security concerns.”
Bank and credit card companies will have the most important roles in mobile payments, according to the business leaders surveyed. They placed telecommunication companies third, ahead of such specialist online payment players as PayPal, Boku and Obopay; online service provider giants such as Google, Facebook and Amazon; retailers; and technology companies.
Among U.S. respondents, online service provider giants placed third, followed by specialist online payment players and telecommunication companies, which were rated of equal importance, and retailers and technology companies.
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