Anyone frustrated by the slow progress in adoption of mobile pay by consumers can thank Edward Snowden.
Whatever side of that debacle you fall on – horror at the idea of Big Brother watching, or horror at the ease with which an NSA employee was able to leak thousands of classified documents – one thing is clear: putting the genie back in the bottle with respect to the public’s privacy concerns is going to take time.
Even the most even-keeled among us can’t avoid at least a flickering sense of paranoia post-Snowden, especially when you add in incidents like the Target and Home Depot hacks.
Is it any wonder we value privacy above all mobile commodities?
Think I’m exaggerating? Consider the over-the-top response to Facebook’s independent Messenger app. How many of your friends have yet to download it after all the privacy warnings that circulated upon its release?
While it was much ado about “nothing-more-than-you’ve-already-allowed-via-every-other-app-already-on-your-devices” (including Facebook itself), the list of permissions did give many people pause. As do digital privacy concerns in general.
So Will Mobile Pay Ever Be Accepted?
Yes. Of course it will – just like all other Internet-related activities we used to freak out about (like shopping and banking online). But it will probably take longer than technology companies would like.
Then again, it will depend on how well the front-runners handle things (for those not paying attention, that’s Starbucks and Apple).
Starbucks has been the poster child for single-retailer mobile pay success since its launch in 2011. Apple has just entered the picture with Apple Pay, but could there be a better masthead for an across-the-board mobile pay solution? It’s early in the game, but no one will be surprised in a few months if the numbers bear out that assumption.
But beating (or even keeping up with) Starbucks will still only account for a fraction of transactions (15% in Starbucks’ case), which isn’t exactly a rave for the adoption of mobile pay. Sure, some people are giving it a try, but the real truth is most people are super hesitant about the whole thing.
Mobile Pay is Scary but Inevitable
Here are the two biggest obstacles to adoption of mobile pay, according to a new report by leading engagement and insights platform, PunchTab, people don’t think they need it - and people are afraid of it.
About one-third of consumers are perfectly happy with the payment options they’ve got. And why not? They’re working well. They’re easy enough. What’s the rush to go all futuristic? But those people would probably jump on the bandwagon once mobile pay is being used regularly, and they see which apps are working best.
The real problem is the 62% of people concerned about data security. Comprised of people who don’t trust technology, are concerned about privacy, and/or concerned about the security of their personal information, this majority is who retailers and broader mobile payment solutions companies (like Google Wallet and Square) have to convince that mobile pay is safe, above all else.
For that you’re going to need a little help. (More on that below.) First, some good news. While the overwhelming majority either see no need or are wary of mobile pay, they still offered up a wish list of features they’d like to see incorporated into a mobile payment app. Sounds like they plan to join the ranks eventually, doesn’t it?
Consumers Want Specific, Yet Broad
Knowing what consumers want will help brands smart enough to give it to them gain the edge as consumers cross over from hesitation to adoption, and it will happen sooner than you think.
In short, consumers want it all. They want a mobile payment app that:
· Can be used anywhere, but also offers store-specific integration
· Speeds up the checkout process, and eliminates the need to carry cash or credit cards
· Connects to their favorite loyalty programs, accruing and displaying points earned, as well as offering special deals and coupons
By 2020, the mobile payment industry is projected to reach nearly $3 billion (US) according to a study by Grand View Research, Inc. But retailers and other app developers shouldn’t assume that means they have plenty of time to get in on things.
Yes, most consumers are leery right now, but that will certainly change as early adopters spread the word (the help I mentioned above), and prove privacy concerns to be over-blown. Savvy Millennials (who particularly want store-specific integration along with broad-use options, even more than the 35+ demographic) are major influencers of all things tech, swaying older generations to jump on board.
Smart retailers won’t run scared just because consumers are – they’ll get in the mix and stake their claim in the mobile pay game now. Those that do will surely reap the benefits down the road when mobile pay becomes the next big thing we take for granted.
Where do you fall on the mobile pay spectrum? Are you nervous about data security, or just waiting until all the kinks are worked out before picking an app?