Smartphones have become substitutes for almost everything. Who needs a fancy camera when there is a performant one on all of the latest phones already? And what is the use of buying an MP3 player when everyone’s favorite handheld device comprises one by default? Finally, why would people even try to speak when they can just text each other by tapping on their digital slabs? Okay, maybe that last one is pushing it too far, but you get the point: smartphones rule over pretty much everything. However, it is quite surprising to realize that they haven’t been able to replace our wallets yet. Cash and cards, both payment mediums that should supposedly have been considered “antique” by now, are still in the game. And it looks like they are going to stick around for quite a while…
Statistics speak a surprising truth
PYMNT.COM is a company that caters to “the online covering of payments news and top industry trends.” It has recently run a survey that has revealed the following statistics: only 21 percent of the people having access to Apple Pay have actually used it, while Samsung Pay and Android Pay have been tried by even fewer of their respective potential customers. Samsung Pay would have been used by only 14 percent of the demographic to which it is available, and Android Pay seriously lags behind with an incredibly low usage percentage of 10. To make matters even worse, the survey further demonstrated that most of those people went back to cards and cash after trying mobile payment services only once or twice.
In the light of such appalling customer response, the leaders of the field must certainly be pondering over what went wrong. After all, Apple Pay was launched in 2014, followed by Android Pay in 2015. Shouldn’t those services have taken off already, as almost everything else that is pushed onto the world scene by trendsetting tech giants like Apple and Google? Well, not exactly… Mobile payment, as opposed to other technology-powered services and products, is complex and particular sensible in execution. “There are three factors right now limiting mobile payment adoption: Value proposition, lack of ubiquity, and fear,” stated Daniel Csoka, the managing director of Mobile Money Matters. “What is the value proposition for me to make a mobile payment? My credit card works just fine.”
First of all, switching habits should be worth the investment that is breaking out of a routine. Getting used to executing an everyday task in a new way requires adaptation, if not learning, and sometimes, one simply does not have the time. After all, what do you get out of switching your card for your phone? For the moment, not much, according to many. Swiping your magnetic stripe card would be pretty much equivalent to using your mobile phone at a Point Of Sales system. The only difference between the two methods might be that the latter could be a cool trick that will potentially amuse your parents for a couple of weeks. But is that enough? For many, certainly not.
Next, comes availability. One of the issues pertaining to mobile payment is that the latter has not yet permeated the totality of businesses. Going to your local retailer with your phone only, for instance, might result in you discovering with dismay that the Point Of Sales system there does not support Apple Pay, Android Pay, or any kind of mobile payment platform at all! According to a recent survey by JP Morgan Chase, only 36 percent of the merchants interviewed would accept smartphone-powered transactions at the time of writing, but interestingly, about 69 percent see themselves having recourse to digital wallets within the next 5 years. Normally, big franchises and large businesses are the ones to invest in supporting mobile payment. And those would normally be concentrated around big cities and populous towns. The further one would distance himself or herself from highly urbanized regions, the less are their chances to encounter retailers supporting mobile payment.
Finally, and quite unsurprisingly, the final factor hampering the spreading of mobile payment is that of security. People often ask themselves if digital wallets are actually safer than the cards and cash that they are accustomed to. Interestingly, the security threat that individuals fear is tied to personal information leakage. A MasterCard survey revealed that 77 percent of Americans are anxious about their financial information and social security numbers being stolen or compromised, while 55 percent admitted that they would rather have their “nudes” leaked online than have their financial data stolen.
“It’s like the early days of online payments, no one wanted to put their credit card online because they were worried hackers were going to steal it. We’re seeing that same trepidation with mobile payments,” adds Csoka.
Mobile payment’s growth is not actually compromised
Sure, the current situation that encompasses mobile payment and its promoters could be described as a rather rough start. However, as a novel technology where more is involved, it is quite understandable that reticence might take a while to fade away. Besides, the 3 factors that hamper the spreading of the transaction method might not be unfixable.
You might not realize it, but your smartphone could actually help make a transaction more secure. On most of the latest Android and IOS devices, biometrics ensure security when it comes to unlocking the phone or navigating through apps that involve private data. One of the most popular biometric implementation used at the moment would be fingerprint authentication. With a sensor usually placed either at the front of your handled device or at its back, you could easily make a secure transaction in just one tap! There is no lengthy password required, and the probability of your fingerprint landing in somebody else’s hands are incredibly low!
It might be true that for the moment, mobile payment is not widely available. However, it does not mean that it will not be in the near future. Technologies that are that pivotal normally take a while to firmly establish themselves, but companies like Google are already trying to further their mobile payment agenda as fast as they can already. For instance, it was announced in July 2017 that Android pay would soon be available at hundreds of thousand of new locations.
The facilities that Mobile Payment would enable are bigger than what everyone is willing to see. One of the most important would be a facilitated shopping experience, whereby, for example, you could just walk into a store, pick up the one item that you have been eyeing online for a while, and walk out right away without even having to queue up at a cash register. This dream situation, along with the other benefits of mobile payments will eventually change the game. But maybe some things are just not meant to happen as fast as we want them to.
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