5 years ago

Reality check: Consumers not ready for mobile wallets

Mcommerce, mobile wallets, Near Field Communication – buzzwords the travel industry has been throwing around with increasing enthusiasm in recent years.

With Apple’s Passbook starting to gain some momentum (at least in terms of providers integrating with it) and mobile ticketing likely to become a norm rather than unique feature, perhaps the industry would probably expect consumers to really embrace the technology.

The reality is perhaps somewhat different.

An independent study by UK firm ICM Research of over 2,000 consumers found a lukewarm attitude to use of mobile wallets and 2013 is unlikely to be the year where mass adoption finally kicks in.

The problem is not one of awareness, ICM’s study found that 80% know that some mobile devices can be used as mobile wallets, it’s just that only 8% are currently doing so.

A third (34%), however, said they would consider using their mobile to make payments, collect vouchers, buy event tickets or for transport.

It appears that one of the drivers to wider adoption could be by offering incentives, with over half (51%) claiming they would consider using a mobile in such a way if given a discount on services.

Chicken and egg – especially when it comes to security, mirroring the same concerns many consumers had back in the early days of the web.

This centres on accepting PIN numbers, passwords and entering credit card details, with ICM claiming it goes “against the somewhat casual ‘wave and pay’ ethos of contact-less paying highlight that there’s more work to be done to promote mobile wallet than simply increasing smartphone penetration”.

But another key finding:

“Consumers are ready to accept a range of security measures to gain confidence in Mobile Wallet – 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.”

With regards to NFC, hardware appears to be a stumbling block here, with consumers reluctant to upgrade to fully functioning, NFC-enabled phones when tied to lengthy contracts with providers.

Jamie Belnikoff, associate director at ICM Research, says:

“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.”

NB: Mobile wallet image via Shutterstock.

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Kevin May

About the Writer :: Kevin May

Kevin May was a co-founder and member of the editorial team from September 2009 to June 2017.



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  1. Sceptical Corporate Traveller

    Nice piece Kevan! It’s good to see an article about the reaction of real “users” to technology. Wallets won’t go until money goes and that is just not going to happen. Given that you need a wallet, cards remain convenient and replacing them is unlikely.
    The problem with Apple’s suggested strategy is precisely that these are things you don’t carry all the time, hence carrying then is not particularly inconvenient to ENOUGH people for real ubiquity.
    Not holding my breath!

  2. Glenn Gruber

    I find it interesting that over half the respondents want incentives/discounts to use the mobile. What this tells me is that people don’t see the mobile wallet as a more convenient than current payment methods. Part of the issue may be that they recognize NFC isn’t everywhere and therefore still requires the individual to carry their real wallet for other transactions (besides using cash, which also requires the real wallet). So where is the utility?

    Where Apple may have gotten it right with Passbook is that they’re not trying to replace the payment methods of wallets, but replacing having to carry other things they would not normally have in their wallets (movie tickets, boarding passes) or stuff that can be hard to fit (e.g. a myriad of individual loyalty cards or top up cards; note this seems to have driven the massive success of Starbucks’ mobile app).


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