New research suggests that NFC and mobile wallet technology is just too immature to find its way into the mainstream in 2013.
ICM research has already taken the very idea of a ‘mobile wallet’ is unlikely to take off into 2013. Even contactless payment debit cards are rarely used – while 80% of consumers are aware of the technology, just 8% use it.
ICM analyst Jamie Belnikoff believes this is due to a lack of terminals in stores, and little to no promotion of the technology. According to the research, consumers also have concerns regarding security.
“Google Wallet, Apple’s Passbook, Oyster cards and other transport passes, as well as contactless ‘wave and pay’ cards are stepping stones that will encourage early adopters to convert to Mobile Wallet. The market needs to combine incentives with added security measures and communicate them widely if it is to build consumer confidence that will help drive the adoption of Mobile Wallet,” he said.
What happens if users run out of battery or if they lose their mobiles?
The lack of NFC inclusion in the iPhone 5 was considered a big blow for the contactless technology, which industry observers have long picked as the future of payments. The idea of merging payment cards, transport tickets and even discount cards with mobile phones in a form of ‘mobile wallet’ has long been a popular one. O2, Google and Apple have all experimented with the software end of the arrangement, but a physical chip or some other method of payment has not been taken up as fast as predicted. The Samsung Galaxy S3 included NFC, and the iPhone 5 was widely tipped to drive mass adoption of the technology – to no avail.
“There simply aren’t enough NFC enabled smartphones which means many people can’t yet make contactless payments by mobile even if they wanted to. A major barrier to take up in 2013 is that smartphone users tend to be tied into long contracts, and people won’t break their contracts just to get an NFC enabled device.”
Incentivising use of mobile wallets would also help, ICM’s research showed that 51% of users would use mobile payment services if there was a discount for doing so. The same number of users would use mobile payments if security concerns were addressed. 55% of those surveyed said they would worry more if they lost a wallet or purse rather than their mobile – so combining the potential for wallet and phone losses in a single device understandably raises concerns.
A range of security measures have been proposed – including a bank/mobile provider guaranteeing any financial losses (56%), to entering a PIN on every transaction (43%) or after a number of transactions (37%), being able to shut the mobile down remotely (40%), setting a daily cap on spending (34%), facial recognition (33%) and voice recognition (24%) on the mobile handset all getting favourable responses.
“We believe there is a huge opportunity for brands and especially retailers to develop their mobile offer – without the need for investment in terminals, staff training and in-store promotion. We urge both brands and retailers to maximise this opportunity as a great way to engage with consumers in 2013.”