The expectation of mobile payments being taken up by a wide segment of the U.S. population in a short amount of time never really came to be. The author hones in on the variety of reasons it has not.
Some experts say what’s holding back consumer acceptance of mobile payments is coupon/rewards motivation, others say it’s security; some comment that the time spent on transactions due to the newly sanctioned chip and PIN authentication will force consumers to switch, others think a winning customer experience will be the turning point in driving users to mobile wallets.
Mercator Advisory Group posits that it is safe to say that all the reasons laid out, and probably a few more, have all contributed to this tepid uptake. The movement from a wallet based payment method to a mobile device payment method appears to make good logical sense, but as the author herself confessed, there are irrational forces at work, fear and habit.
I’ve ended up asking myself the same question that researchers, financial services institutions and payment experts out there have been asking: “What is it that’s holding consumers back from using mobile payments?” Do consumers need to be put in a “no other way to pay” situation for mobile wallets to take widespread hold?
Outside of my extreme scenario, I believe it will be education, promotion and saturation of the “easy way to pay” message that will lead to consumer adoption. The door is open for financial institutions, payment firms and retailers to break out the crayons to educate consumers on this simple, time-saving option when it comes to making a payment.
A combination of incentives rewarding short-term and long-term use of mobile wallets will help to accelerate the transition, with each individual finding their own motivation. But retailers can do little more than facilitate the schemes. It will be the issuers and acquirers that have the ability to bring the most to pressure to bear, and we have yet to see that happen in earnest.
Overview by Joseph Walent, Associate Director, Customer Interactions Advisory Service at Mercator Advisory Group
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