An estimated 41% of North American smartphone owners are fully aware that their phone can be used as a payment device at retail counters, yet only 16% of them actually make use of this payment method. The challenge for retailers is to persuade them to go this route.
A recent report from market research and consulting firm IDC Financial Insights predicts that the global value of proximity payments – i.e based on either Near Field Communication (NFC) or mobile bar code transactions – will reach $296 billion by 2017. Management consultancy Accenture has now carried out a study* among North American consumers who are smartphone users, to try to work out how consumers can be encouraged to make more use of mobile payments. Accenture stresses that while of course actually developing such technologies as NFC and barcodes for mobile is important, persuading consumers to become regular users of this functionality is “the next critical step.” The survey results suggest that in order to widen adoption by existing users and encourage adoption by non-users, mobile payment apps should all be part of a system designed to incentivise consumers through rewards or other value-added tools.
Assuaging concerns, providing rewards
Some 45% of respondents who do not currently make mobile payments said they were concerned about security and 37% expressed worries over privacy. Accenture stresses the need to “educate” consumers that “mobile payments are generally more secure and more convenient than other options” but also concludes that rewarding consumers for using mobile payments would encourage them to do so. Some 60% of those surveyed who already make mobile payments said they would do so more often if they received instant coupons as a result, while 46% of users polled also indicated that they would step up their mobile payments if offered short-term location-based coupons. In addition, “about one in five non-users said that special coupons or reward points stored on their phones, a dedicated line at retailers, or priority customer service might encourage them to make payments using their phones.” Moreover, “to encourage both existing users and non-users to make mobile payments, mobile payment applications need to be supported across a range of different devices and mobile networks,” recommends the Accenture report.
Offering more services to meet consumer needs
Only 7% of non-users said they were willing to switch their phone, wireless carrier or bank to enable them to make mobile payments, but around one in three non-users said they would be more likely to make mobile payments if they were able to use their smartphone as proof of ID or insurance, or could access financial management tools. Underlines Accenture: “Unsurprisingly, expanding the number of situations in which consumers can make mobile payments would increase usage.” For example, around half of all consumers who already make mobile payments said that they would do so more often if they could use this method to pay for petrol at the pump, and 46% of the non-users also said that the ability to pay for petrol using their smartphone would encourage them to try mobile payments.
*Consumer Mobile Payments Survey: ‘Driving Value and Adoption of Mobile Payments —Consumers Want More’