While Exposure to Mobile Payment Grows, Concerns over Security and Lack of Compelling Reason to Use Tool Continue to be Key Roadblocks to Growth
“Mobile vendors” currently the main growth segment within the mobile payments category
NEW YORK, Nov. 15, 2013 /PRNewswire/ — Mobile transactions — running the gamut of everything from having your payment card swiped through a smartphone attachment to using mobile apps to redeem offers to tapping your smartphone to a special in-store device to pay for an item — are showing growth in the percentage of Americans who have experienced them firsthand. However, the segment — particularly in its tap-to-pay application — is still struggling to earn consumer interest.
‘Tap-to-Pay’ expectations mixed
Consistent with a 2012 Harris Poll, majorities of Americans appear to be anticipating tap-to-pay smartphone payments eventually replacing payment card (64%) and cash (59%) transactions (72% and 66%, respectively, among smartphone users) in the future – but not in the near future. Three in ten Americans (29%; 33% among smartphone users – down slightly from 32% and 38%, respectively, in 2012) believe such transactions will replace payment card transactions in less than five years, and one-fourth (26%; 29% among smartphone users – comparable to 26% and 31%, respectively, in 2012) believe it will replace cash transactions within that timeframe.
However, more smartphone users than in 2012 indicate that tap-to-pay transactions will never replace payment card (24% 2012, 28% 2013) or cash (30% 2012, 34% 2013) transactions.
Firsthand experiences on the rise…
Taking a step back, it’s been an eventful year for exposure to the smartphone payment realm. Americans – smartphone users in particular – are more likely than in 2012 to have either personally completed or witnessed firsthand each of a series of mobile transaction types, including (but not limited to):
-- Paying for a product or service with a credit card and having your card swiped through an attachment on the seller's smartphone, sometimes referred to as "Mobile vendor" type transactions (Americans: 25% 2012, 32% 2013 / Smartphone users: 35% 2012, 43% 2013). -- Processing a payment by tapping your smartphone against a special receiver at a store or other merchant, instead of using cash or a payment card (Americans: 13% 2012, 17% 2013 / Smartphone users: 18% 2012, 23% 2013).
…but interest declining for tap-to-pay
Looking at the consumer side of the equation, while tap-to-pay experiences may be on the rise, interest in using a smartphone to process in-person payments instead of cash or cards has dropped slightly since last year among Americans as a whole (27% 2012, 24% 2013) and more notably among smartphone users (44% 2012, 37% 2013).
-- Echo Boomers (35%) and Gen Xers (30%) display stronger interest in doing so than Baby Boomers (16%) or Matures (12%).
Among those not interested in using a smartphone to process payments, a simple lack of compelling motivation remains one of the top factors impeding interest, with 53% saying they don’t see any reason to switch from cash or payment cards. This also holds true for smartphone users where a majority (58%) don’t see any reason to switch from cash or payment cards either, although this perspective did decline a bit from 2012 (62%).
Security concerns are the other top impediment; 53% of those uninterested in using a smartphone to process in-person transactions also say they don’t want to store sensitive information on their phone, while nearly half (47%, up from 40% in 2012) don’t want to transmit sensitive information to the merchant’s device. Security concerns are also a worry among smartphone users, albeit with some changes since 2012:
-- Though over six in ten (62%) listed the fact that they don't want to store sensitive information on their phone as a reason for lack of interest, it's worth noting that this position softened from 68% in 2012.
-- On the other hand, the 55% indicating that they don't want to transmit sensitive information to the merchant's device represents a modest increase for this concern since 2012 (51%).
Consumers still waiting for Mobile Payment Motivations
Initiatives to ease the transition over to mobile payments, while moderately impactful on attitudes in 2012, also seem to be losing their footing. Just under one-fourth of Americans (24%) and roughly one-third of smartphone users (34%) indicate that being able to make mobile payments while still taking advantage of their existing credit card reward programs would make them more interested in doing so, representing drops of four and six percentage points, respectively from 2012 (when 28% of Americans and 40% of smartphone users said it would make them more interested).
The ability to use a smartphone as a “digital wallet” with electronic versions of all the identifications, loyalty program cards and other documentation normally carried in a wallet (thus freeing consumers to leave their wallets at home) experienced similar drops, with 26% of Americans and 36% of smartphone users (down from 30% and 43%, respectively, in 2012) saying this would make them more interested in doing so using a smartphone to make in-person payments.
“Dwindling interest since last year may be an indication that the initial interest has fallen short with practical use, and has not yet been followed up by a constructive call to action by manufacturers and retailers,” explains Aaron Kane, senior research director at Harris Interactive and a key consultant on Harris Poll TECHpulse, a new research product designed to track consumer awareness of and attitudes toward emerging technologies, such as mobile payments. “Right now, the bottom line is that consumers don’t yet feel as if they’re being presented with a compelling enough reason to switch their payment habits, nor are they confident that these new methods are secure. This knowledge ‘gap’ represents an opportunity for companies to change the conversation by addressing these issues head-on.”
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This Harris Poll was conducted online within the United States between September 18 and 24, 2013 among 2,577 adults (aged 18 and over). Figures for age, sex, race/ethnicity, education, region and household income were weighted where necessary to bring them into line with their actual proportions in the population. Propensity score weighting was also used to adjust for respondents’ propensity to be online.
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The Harris Poll(®) #84, November 15, 2013
By: Larry Shannon-Missal, Harris Poll Research Manager
About Harris Interactive’s TECHpulse Research Tool
TECHpulse is a multi-client product development and marketing research-based tool that provides trendable business information on consumer consumption and attitudes towards a variety of technology categories (i.e., Wearable Technologies, Mobile Payments and more). It also delivers strategic consumer insight into new and emerging technologies to support business decision-making. Companies can use TECHpulse research to…
-- Fine-tune existing product lines -- Develop new product lines -- Help prioritize feature development -- Help with feature packaging and pricing -- Guide the direction of technology strategy
About Harris Interactive
Harris Interactive is one of the world’s leading market research firms, leveraging research, technology, and business acumen to transform relevant insight into actionable foresight. Known widely for The Harris Poll®, Harris offers proprietary solutions in the areas of market and customer insight, corporate brand and reputation strategy, and marketing, advertising, public relations and communications research across a wide range of industries. Additionally, Harris has a portfolio of multi-client offerings that complement our custom solutions while maximizing a client’s research investment. Serving clients worldwide through our North American and European offices, Harris specializes in delivering research solutions that help our clients stay ahead of what’s next. For more information, please visit www.harrisinteractive.com.
SOURCE Harris Interactive