Mobile payments not growing as fast as expected

Despite a bonanza on Black Friday and an increased use of mobiles to pay for bargains, there are still barriers to mobile commerce. According to Akamai, there were 1.845 million page views a minute on Thanksgiving night, with mobile playing a bigger role than ever. With mobile traffic representing 14.3% of visits to major sites and 9.8% of shoppers using their smartphones or tablets to make purchases, we could be forgiven for believing that mobile payments have arrived.

However, a new report from Mobio Identity Systems throws some cold water on the party. A survey of 1,085 people across North America confirms the theory that security concerns are responsible for the fact that mobile payments are not growing as fast as expected.

The survey confirmed that 94% of respondents would make a mobile payment if they knew it was secure. That said, with 82% of respondents seeing themselves making a mobile payment within the next year, perhaps there is a confidence amongst customers that the industry is on the case and able to fix it.

The truth, of course, is that while the industry is on the case, it will need to keep on the case for the foreseeable future. As fast as one loop hole is shut, another is opened. In their worldwide telecom fraud survey, industry body CFCA estimates that fraud losses exceed $40 billion a year. The biggest threat is still from PBX and voicemail break ins, identity theft is second, with international revenue share, by pass fraud and credit card fraud also at the top of the list – all ‘old fashioned’ frauds.

With uncertainty, complexity and hype still prevalent in the mobile payments world, the eco-system is fragile and this is no time for self-congratulation. With customers generally believing that mobile payments are an addition to their payment options, and simplicity and speed, as well as security, are still factors in customers not embracing the technology, ubiquity is far from assured. Mobile payments are still a work in progress and the tipping point is dangerously close – let’s hope it tips the right way (CP: The tipping point for NFC and M2M – are we ready for the bad guys)?

One Response to “Mobile payments not growing as fast as expected”

  1. Allen says:

    I’m an analyst that covers this area, and I am not at all surprised that mobile payments has problems. You first have to ask yourself, what major problem does mobile payments solve? Not much of any. Currently I have to swipe a plastic card in my wallet and I’ve purchased something. Since I likely carry money and a drivers license, I don’t think carrying a credit card or debit card is a major hassle.

    On the down side, phones get hacked, my phone is always network connected and therefore susceptible, and I’m not so sure I want my wireless operator to have access to all the purchases I’ve made.

    So mobile payments is a solution to a problem that doesn’t exist.

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