94pc of consumers would make a mobile payment if secure: report
Despite the fact that there is a high level of interest from consumers in making mobile payments, security concerns are the largest barrier to market growth and consumer adoption, according to a report by Mobio Identity Systems Inc.
If security concerns can be eradicated, the mobile commerce market may finally reach its long-anticipated exponential growth, per Mobio. The key finding of the report is that 94 percent of consumers would make a mobile payment if they knew it was secure.
“This indicates an overwhelming interest in the mcommerce market from a consumer perspective and, as industry leaders, we are excited to see this,” said Mark Binns, chief marketing officer of Mobio Identity Systems, Vancouver, BC, Canada.
“The most surprising finding was that 51 percent consumers say they have made a mobile payment within the past three months, and 82 percent see themselves making them within the next year,” he said.
“This implies consumer usage growth of over 30 percent within the next year.”
History of mobile commerce
Mobile commerce was first trialed in Finland in 1997 when Coca-Cola released mobile-enabled vending machines that accepted payment via SMS.i In 1998, the first sale of digital content was made with the release of commercial downloadable ringtones.
By 2000, mobile-commerce services spread rapidly with the introduction of mobile payments and purchases all over the world: mobile parking payments in Norway, train ticket purchases in Austria and airline ticket purchases in Japan.
The hype around mobile commerce was huge in early 2000.
Industry professionals predicted that the m-payment market would rise from almost nothing to over $55 billion by 2006.
Another study by Strategy Analytics reported in 2001 that by 2006, mobile commerce revenues would be $230 billion.
Despite the hype and predictions, the mobile commerce market did not grow very fast at all.
In 2009, it was reported that revenues were $68.7 billion and, again, expected to rise exponentially to $633.4 billion by 2014.
Mobio’s study examined the question: What has been holding this market, and the consumers, back? Its survey asking consumers what they thought about mobile payments was distributed to the general North American population, and 1,085 people responded, which makes the findings statistically significant to plus or minus 3 percent, 19 times out of 20.
Advice for brands, retailers and merchants
The mcommerce market has been on the verge of exponential growth for some time now.
With technology becoming an essential part of everyday consumer-brand interactions, Mr. Binns said Mobio feels that the future for mobile payments has finally arrived.
Mobile payments will continue to become increasingly commonplace, so a strategy to integrate this technology is necessary for those brands who want to stay relevant in the consumer mind-space going forward, per Mobio.
“So, we advise brands and retailers to get involved now – being a leader in the space will have significant returns a short timeframe,” Mr. Binns said. “Organizations who want to participate in the mcommerce market should carefully research the options available.
“There are various mobile payment types ranging from low to high security, and knowing what these are and how they differ is extremely important,” he said. “Consumers need to feel a high level of trust towards the brands they are interacting with in the mobile space.
“Brands should identify those elements that make their mobile payment secure and be able to explain to their customers how their information is safe.”