The truth about mobile payments

by Joan Warner

 

Not to boast, but I’ll soon be skipping town for a vacation in Argentina, where natural wonders, tango music, and luscious steaks await. As I was failing to pack yesterday, it occurred to me there’s one thing I don’t need to stress about before my trip: money. Payment app on phone, chip cards in wallet, I can sashay off to the airport ready to spend dollars or pesos with abandon.

 

imageIt wasn’t always this easy. Remember travelers’ checks? Remember those late-night foreign-exchange operations that charged 10% to change your currency? Thanks to technology, all that is history.

 

Except it’s not.The Future of Money,” a study published today by Oxford Economics and Charney Research, shows that while consumers and businesses alike recognize the benefits of digital payments, many remain slow to adopt them. Companies don’t appreciate how much their customers want to be able to pay for things with their phones or tablets. And consumers don’t appreciate mobile payments’ safety, thinking their devices are more vulnerable than they really are.

 

According to Cherian Abraham, digital payments and commerce executive at Experian: “Never before in history have we been able to distill so much power and bandwidth to bring trust to a transaction.” But only 13% of our survey respondents—the same small percentage for consumers and executives—believe mobile is the most secure payment type.

 

Our research uncovered other disconnects and misperceptions. For example:

-83% of executives agree that payment technology can help companies meet strategic objectives. Yet 31% say mobile money doesn’t apply to their business.

- More than two thirds of consumers say facial or iris recognition features would encourage them to use mobile payments. But fewer than a third of companies globally currently use or plan to use biometrics to secure mobile devices.

-74% of consumers say they’d be more willing to use mobile payments if they were indemnified against losses from fraud. Yet only 44% of executives say they offer or plan to offer such guarantees.

 

Despite the obstacles, market researchers predict mobile payment volume will nearly double by 2019, to more than $1 trillion. The World Economic Forum estimates that mobile money adds 0.47% to a country’s GDP. And while correlation doesn’t necessarily imply causality, our research found that the fastest-growing businesses are the likeliest to offer mobile purchase and payment apps.  

 

Working on this study taught me a lot. For one thing, predictions of a totally cashless society are probably utopian visions. On the other hand, top global brands are making mobile payments a critical part of their companies’ long-term growth strategies. To get at the truth about mobile money, you need to discount the hype while understanding the potential—and that was the goal of our research.

 

Click here to read the full report.