Are consumers ready to move from leather to mobile wallets?

There has been much talk around mobile payments in recent years but it seems as though 2015 is the year in which words are being put into actions. Recently Google announced its plans to launch Android Pay towards the end of this year, a reinvention of its Google Wallet which struggled to attract widespread adoption as a mobile payments system four years ago. Then Apple informed us that it would be bringing Apple Pay to the UK this month. The spotlight is well and truly on the mobile wallet but is the market ready?

A solution that offers both a novel new payment alternative and convenience will be hard for a consumer to turn down. You only have to look at the rapid growth in contactless card payments in 2014 to see consumer appetite for this ‘touch and go’ style of interaction at point of sale. In fact, according to a recent report by the UK Cards Association, around £2.32 billion was spent using contactless cards in the UK last year, with more transactions taking place in the first six months of the year than the previous six years combined. In addition, a new YouGov survey found that nearly half of consumers would be willing to try mobile payments out.

This same YouGov survey also highlights that for 81% of consumers, security is the primary concern associated with using their mobile phones to pay for things. So while the demand is there in principle, if consumers are in any doubt as to whether their sensitive payment data is at risk, the concerns may well outweigh the benefits of ease.

It is perhaps unsurprising that security concerns remain around mobile payments in the minds of consumers. The numerous data breaches resulting in loss of customer information illustrate just how rife attacks on consumer data are. Recent news of the NitlovePOS as the latest malicious software used to target the retail market as well as a string of high profile payment data breaches at point of sale demonstrate a call for strong security. Ensuring that consumer data is protected will be crucial if mobile payments are to make a lasting impact in consumers’ everyday lives. Only when consumers are offered a universally trusted solution to securing their valuable data will we reach the ‘tipping point’ for mass-adoption in the mobile payments arena NitlovePOS as the latest malicious software used to target the retail market as well as a string of high profile payment data breaches at point of sale demonstrate a call for strong security. Ensuring that consumer data is protected will be crucial if mobile payments are to make a lasting impact in consumers’ everyday lives. Only when consumers are offered a universally trusted solution to securing their valuable data will we reach the ‘tipping point’ for mass-adoption in the mobile payments arena.

Although it’s not yet clear which model will prevail from a security perspective, it is paramount that high assurance data protection is at the top of the agenda. As the mobile payments market continues to grow, providers such as Google and Apple will find themselves facing a constant challenge regarding how to balance consumer convenience with ensuring the data is secure and protected from potential threats. As more developments in the mobile payments arena continue to hit the headlines, it will be interesting to see what action providers and banks take as well as the impact this has on consumers’ levels of trust to cash in on a mobile wallet.