Mobile payments should be packaged with other services, incentives to drive adoption: Accenture
Adding financial management tools and financial incentives to mobile wallets could help drive mobile payment adoption, according to a new survey from Accenture.
While mobile payment adoption is still relatively low, consumers are poised to replace their physical wallets with digitial ones, according to a new survey from Accenture. The results show that current mobile payment users as well as non-users can be encouraged to use their smartphones to make mobile payments through rewards or other value-added tools.
“The big new is that consumers are ready to adopt mobile payment what they need is a reason and an incentive to do that first transaction and once they do that first transaction the uptake and the explosion of mobile payments will occur,” said Matthew Friend, managing director of payment services at Accenture North America. “They are already looking past just payments and looking to use that mobile wallet for everything they use a physical wallet for.
“They are looking to take loyalty, rewards, their driver’s license, identification, insurance and take it into the mobile wallet,” he said. “They are getting ready to leave that physical wallet behind.
“They just need to make sure that the rest of the industry and the government is ready to enable it in a secure way.”
Encouraging broad adoption
Getting consumers to use mobile payments in the first place is the biggest challenge the industry faces, per Mr. Friend.
Also, a significant number of consumers still do not understand the convenience and value of using their smartphones to make payments.
For widespread adoption to occur, consumers need to be educated about the fact that mobile payments are secure and more convenient than other payment options.
The results suggest that financial institutions, merchants, mobile network operators and technology providers should consider incorporating new mobile payment applications to encourage broad adoption as quickly as possible.
The survey of 4,000 smartphone users in the United States and Canada found that 60 percent of those who currently use their smartphones to make payments said they were highly likely to pay by phone more often if they could use their phone to track receipts, 56 percent cited a desire to be able to manage their personal finances, 56 percent want to be able to use their smartphone to show proof of insurance and 54 percent to show proof of a valid driver’s license.
Additionally, 60 percent of those who currently make mobile payments said they were highly likely to pay by phone more often if they were offered instant coupons from retailers when buying by phone while 51 percent would pay by phone more if retailers rewarded points stored on their phone for future purchases at the store, 50 percent would pay by phone more if coupons could be automatically stored on their phone and 50 percent said preferential treatment, such as priority customer service, would encourage more mobile payments.
For those who are not currently mobile payments users, 32 percent said they would be more likely to use mobile payments if they could use their phones as proof of insurance or to track receipts, 21 percent said that they would be more likely to use mobile payments if they received preferential treatment at retailers and 20 percent said the ability to store coupons for future purchase would be an incentive.
The survey also found that security concerns are the greatest barrier to consumer adoption of mobile payments, with 60 percent of respondents who do not use their smartphones for mobile payments citing security concerns as a reason for not doing so. Privacy issues and the convenience of using cash, checks or credit cards were the next-most-mentioned reasons, each cited by 37 percent of respondents.
“Consumers are ready to deploy,” Mr. Friend said. “The industry needs to make sure that the education occurs first about the benefits, in particular about the economic benefits, but also the privacy and security that really comes from this.
“With that, how government and other entities that put things in your wallet, how they can come along really as that second track after the roll out of wallet will be key to making consumers more comfortable,” he said.
Chantal Tode is associate editor on Mobile Commerce Daily, New York