By Natasja Bolton, Senior Acquirer Support QSA
Mobile Payments, a broad term covering consumer and merchant-initiated mobile payment methods, have been gaining acceptance in the market place; however, have these methods achieved broad acceptance with consumers and businesses alike?
In our article ‘State of Pay – have mobile payments reached a turning point?’ we explored the possibility that 2016 into 2017 was the year when mobile payments truly become a consumer expectation. In this follow-up article, we look at the progress made so far.
As we previously reported, big retailers and service companies have developed mobile-focussed solutions that enable purchases to be conducted via mobile devices, in turn consumers have reacted increasingly positively and acceptance has grown.
Mastercard’s recent Masterindex 2017 report analysed e-commerce and payment trends across 23 European markets, surveying 43,000 consumers.
The report found that, when it comes to online payments at least 40% of Europeans made card and online banking purchases using a PC/laptop, while 33% of Europeans did the same from a mobile device. Moreover, 25% of Europeans with internet access purchased products or services online once a week.
This is a fairly high level of acceptance when it comes to online purchasing; however, it also indicates that further progress needs to be made with convincing consumers and businesses to conduct more online transactions on mobile devices.
When surveyed about choosing a payment method, 33% of European online shoppers stated convenience was the main driver followed by, security and speed.
Visa’s 2016 Digital Payments Study, that surveyed 36,000 online consumers in 19 European countries, painted a similar picture of increasing acceptance.
Visa’s survey states that now more than half of European respondents in all age brackets are using mobile banking, with the number of non-users having dropped from 38% to 12% in the space of one year. Interestingly, with the fastest growth rate for mobile banking adoption amongst 55-64 year olds.
In terms of geographic adoption of mobile devices for online banking and payments, countries that top the list can be categorised into two segments; developing markets and developed markets. At the top, Turkey leads with 91% of people using mobile payment , followed by Denmark 89% and Norway 87%.
Another developing country, Romania also prominently features with 79% of people being mobile payment users. This shows that some developing markets are largely bypassing traditional payment methods and adopting new technologies at a faster rate. However, Visa’s report did not mention the frequency of mobile payments use by these respondents.
In the US, general banking app use seems to be common, according to Tsys’s 2016 US Consumer Payment Study. The report found that 16% of consumers in the US use a mobile banking app daily, 20% a few times a week, 7% once a month or fewer. While 44% do not use a mobile banking app at all, that is a 10% decrease in non-users in one year (2015 to 2016).
Though these numbers do not mean that all these users were also making online purchases, the study does reflect an increasing consumer willingness to use mobile devices for payment-related activities.
Progress made, barriers still remain
It would appear that mobile payment methods still have some way to go before they are completely accepted by consumers and businesses, but what are the blockers? When it comes online payments in general, the main barrier according to Europeans is the fear of fraud, 56% stated this.
Followed by control over payment, 22% and acceptance at 14%, meaning that consumers believe that they cannot make all purchases online. Judging by this, it is safe to assume that mobile payments also suffers from similar trust and security issues in the eyes of the consumer.
As we highlighted in our previous article, from the perspective of a small business, steps need to be taken to keep up with consumer expectations and, as the new statistics indicate, security concerns.
This means small businesses need to offer consumers the ability to shop and pay anywhere, anytime using their mobile device, while also highlighting that their online purchase is compliant and secure. Larger businesses will find it easier that smaller businesses to adapt and offer simpler and more convenient payment options.
The risk is that if small businesses do not keep up with consumer expectations then they will lose custom.
Talk to Sysnet about promoting your product set through our Merchant Contact Services. We offer a wide range of services from inbound terminal upgrade support through to outbound merchant contact, to promote terminals with new functionality such as mobile payments acceptance.
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