by Joan Warner
If you’ve ever been pickpocketed or had your credit card hacked, you know the feeling: nausea (ugh, some stranger is all up in my business), anxiety (how bad will it get?) and weariness (now I have to make a bunch of phone calls).
And if you’ve ever redeemed reward points for a plane ticket or fancy meal, you know that feeling too: the pleasurable frisson of getting something for “free,” seasoned with a delicious pinch of smugness.
Which feeling dominates when people choose a payment option? It turns out the behavioral economists are right—fear trumps greed. Thanks to technology, consumers today can use their mobile phones and tablets to order food, get a car ride, pay bills, move funds between bank accounts, split a restaurant bill, or settle a sports bet with a colleague, all without touching our physical wallets.
Yet consumers worldwide use mobile money for fewer than 8% of their transactions, according to a new global survey by Oxford Economics and Charney Research. And fear explains, at least in part, why that number is so small. More than half (55%) of consumer respondents think mobile money is less secure than cash or cards; 67% say mobile payment methods leave them vulnerable to monetary theft; and 70% believe mobile puts their personal information at risk.
OK, so how about the greed part? Our survey, conducted in partnership with NTT Data Consulting and Ingenico ePayments, asked consumers what induces them to use mobile money. Just over two thirds (67%) say loyalty points, cash back, or discounts appeal to them, and 62% like personalized offers. But many more—74%—say fraud protection is what matters. They want to feel confident, as they do with credit cards, that they won’t be on the hook for purchases they didn’t make if their phone gets hacked.
The “Future of Money” study will be published in January 2017. Between now and then, watch this space for more tidbits from the research.
Joanie Warner is the Thought Leadership team’s Managing Editor for financial services.