The Broken World of Mobile Payments and How to Fix It

by Joseph Walent 0

Changing human behavior, especially when dealing with a task that is repetitive in nature, is never easy. For many of us, if not most of us, payment has been “cash or card” for the majority of our lives, and that has been a long time indeed for many of us. The article seeks to identify some of the speedbumps the mobile payment industry is encountering, and lists concerns about security as the primary issue.

However, it seems security is still prohibiting some of the mobile payments. Yeager informed the audience that “57% of US internet users cited security concerns the main reason they were hesitant to use mobile payment services.” He also stated that “62% of US smartphone owners that don’t use or plan to use a mobile wallet cited worries about security as the reason.”

Well, yes. Whenever confronted with something new and outside of what we are familiar with doing regularly, the first thing that I feel is unsettled. Fearful. Not wanting to appear foolish. But it is much easier and safe to say, “I don’t think that my information will be safe in this new-fangled program, so I am not using it” than “I am not sure if I know how to do it” or “I don’t want to be the guy holding up the line trying out a new payment and screwing it up”. The article takes some time to get to this, but eventually says:

According to studies conducted by The Pew Charitable Trusts, there remains a portion of the population who are satisfied with their current banking system because they feel it is more secure and less complicated than mobile payments. Additionally, non-users of the mobile payment system also enjoy the incentives their credit or debit cards provide.

Until more people feel the safety issues have been addressed, and they learn how to use the mobile systems with ease, mobile payments will remain a tough sell for those who are set in their ways.

The heart of the issue is that mobile payments is new, it is different, and it is not what I’m used to using, I mean, we’re not used to using. At the core of the transition of mobile payments is not whether it’s broken or not, (it’s not broken, the technology affords equivalent if not greater security in many cases), or how globally standardized it is presently because most of us are not globetrotting regularly. The core issue is that it is new and different from what we have been doing, and adversity to change is rooted in human nature and practicality.

Mercator Advisory Group sees the transition to mobile payments hinging on how each of us answer two questions. 1) am I being incented to change, i.e. do I benefit from taking the time and energy in changing to mobile payment mechanisms in a real, instant and appreciable way? And 2) is it worth the conscious effort to do so, i.e. is it accepted where I typically transact? Once the magic number of us homo-sapiens make the determination in the affirmative to those questions, the uptake of mobile payment methods gain real traction.

Overview by Joseph Walent, Senior Analyst, Emerging Technologies at Mercator Advisory Group

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