Last week, Gartner issued a report stating that while still somewhat on the rise, mobile payment adoption is not growing as fast as anticipated.
The Credit Union Journal followed this up with an article stating that a big reason for the hesitation is consumer fear, rooted in the security risk that mobile payments bring to the table. With increased awareness of data breaches, I think more and more consumers are wary of exposing their financial data in potentially unsecure environments. The case as to why “paying by mobile” is better than cash or credit, just hasn’t been made yet.
Upgrading to smartphones with NFC technology and “mobile wallet” capabilities will clearly be an added expense and it’s unclear whether the majority of smartphone users see the value in NFC or mobile payments, particularly since they can use their existing smartphones to mobile bank and make purchases already. Without proven success that this type of payment will not leave consumer information vulnerable and that they will actually improve the purchasing experience, adoption will take place over an extended period of time.
The ability to change consumer behavior is going to come in the form of increasing security in mobile payment solutions, as well as in consumer education. NFC technology will provide a more secure way to process mobile transactions than existing contactless payment systems because the payment hardware is disabled when the user's phone is not active, ideally resulting in increased security and a decrease in data breaches, which should be both enlightening and comforting for consumers.
Still, we don’t believe that this is a change that will happen overnight. Mobile payments have been evolving over the last 10 years and will continue to do so as technology improves and consumers become more engrained in the “portable” lifestyle.