Companies pushing mobile-payment technology in the United Kingdom have failed to capture the imagination of consumers, who generally indicate low interest in initiating transactions using their mobile phones, new study data suggest.
The 507 credit cardholders who responded to “technical interest” questions as part of an Auriemma Consulting Group Cardbeat online survey in the second quarter indicated little interest in various mobile-pay options.
Auriemma asked participants to rate their interest levels in four technical components–mobile-phone payments, contactless payments, mobile-phone browser use to purchase products online, and product purchases with text messages–and produced a weighted index in which each component represented a 25 percentile. It then gave the consumer interest level of each an index value, and the result related to interest in using phones to initiate payments was 33 points out of a possible 100, the study reports.
“In general, mobile [payment options] rate pretty low,” Megan Bramlette, Auriemma director of international knowledge management, tells PaymentsSource. “I really think it is because contactless doesn’t solve problems for the customer. They still have to wait in line, still have to pay the same amount, and there is even a perception that it is less secure. So why do it?”
Other industry research suggests that transaction security remains a major concern for UK consumers regarding mobile pay (
Making payments with mobile phones is a good concept, but it may have taken too long for companies to execute it as a viable mainstream option, Bramlette suggests.
“It’s cool, but that’s not a good enough reason [to implement],” she says. “It’s making many people ask if mobile pay is headed for the good-idea graveyard.”
Thirty-four percent of the respondents stated they had a smartphone. In the UK, smartphone users on average have 15 applications on their phones, indicating to payment-technology providers that consumers at least understand the potential of mobile channels, the survey indicates.
Even if the survey measured mobile-pay interest among only those respondents who had smartphones, the index value would be 45.9 of a maximum of 100, still a “surprisingly low” figure for a tech-savvy audience, the report states.
“If they come up with a solution where you don’t have to wait in line anymore and you maybe pay less or get rewarded for using your mobile phone, that might change consumer behavior,” Bramlette suggests.
Mobile-pay technology companies will have to develop a product that drastically changes how consumers make payments and that gains wide acceptance because it offers more security than the chip-and-PIN cards commonly used in the UK, Bramlette believes.
Otherwise, most consumers will remain content with credit cards, a payment method that has not changed in 40 years, Bramlette says.
“It is still a piece of plastic used in the same way,” she says of the credit card. “Is there anything else in the world used with that kind of frequency that has not changed? Even the zippers on our clothes have changed in that period of time.”
Other analysts contend mobile-payment acceptance in the UK and elsewhere in Europe even may be lagging behind the United States.
“Europe may create the impression of being further ahead, as the market is more fragmented and there are many more trials in various different countries,” Celent London-based analyst Zil Bareisis tells PaymentsSource. “The reality is that very few [services] are actually in commercial roll-out, so given what Google Wallet is doing in the United States, I would argue that it puts the U.S. in the lead.”
Google Inc. has been targeting customer loyalty and rewards in its marketing of the mobile pay transaction experience in the United States for users of the Google Wallet (
Gareth Lodge, also a London-based analyst for Celent, says the perception could be misleading that consumers embrace mobile pay in Europe simply because it has been available for several years.
“Mobile pay has certainly been around a lot longer in Europe than in the U.S., and some of the biggest pilots have been in Europe. But I'm not sure that Europe is that much ahead in terms of adoption,” Lodge tells PaymentsSource.
Indeed, it may even lag, he adds.
“High levels of debit card usage in Europe, I believe, makes mobile less attractive. High cash and check usage in the U.S. conversely creates an opportunity,” Lodge says.
Despite numbers that indicate mobile pay is not growing at a fast pace, card brands and issuers continue to develop new mobile-payment applications and services hoping to drive consumer interest (
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