Consumers Still Skeptical About Mobile Payment Methods
Smartphones, iPads and other mobile devices have revolutionized the way we perform many tasks, but despite rapid expansion in mobile technology, consumers are still reaching for their wallets, choosing to make payments for goods and services the old fashioned way.
Although Internet usage on smartphones and other devices has increased, the idea of storing credit and debit card information on virtual mobile wallets for quick and easy payments, has not swayed many consumers. Mobile payments account for just 0.1 percent of retail e-
Although Internet usage on smartphones and other devices has increased, consumer confidence in the security of mobile payments remains weak.
Half of all American consumers say potential security and fraud significantly influences the likelihood of them using smartphone technology to make purchases in the future according to industry reports. Consumers are also least likely to use this payment method for physical goods, but these applications however have had some success with businesses selling apps, media and ticketing, possibly because these stores and media services are 100 percent optimized for mobile usage.
Weak confidence has not slowed payment providers like eBay and PayPal however. Both announced partnerships that will allow them to expand their acceptance of mobile payments at the Mobile World Congress this year.
Other expansions include a US$4 million investment by a single person into global mobile payments startup Kuapay, which offers a virtual wallet app. Mobile payments startup Square, also announced that it was rolling out new functionality in it's devices for accepting payments.
Google and PayPal continue to compete for dominance in this industry, but Google Wallet seems to be leading the way with it's NFC wireless technology. PayPals complete range of services however gives them an edge over the technology giant.
Continued expansion in this industry is fueled by the expectation that consumers will eventually catch up and adopt the technology, given rising mobile Internet usage as well as smartphone and tablet sales. But as the industry expands, the government may need to develop rules to keep pace with mobile payment systems according an official from a Consumer Financial Protection bureau.
In the face of a skeptical market coupled with possible government intervention, retailers should weigh their options. Payment providers are ensuring that the industry is technologically ready in the event that consumer confidence increases. As a result, retailers may want to adopt these mobile solutions now to avoid being left behind. To do this effectively, retailers can target their mobile products and services to meet the demand of a specific target group that is more likely to engage in mobile shopping. Using existing payment options like PayPal is another solution that will reduce efforts to develop a customer friendly mobile payment solution in the front-end while keeping back end procedures like accounting the same.
Ensuring that consumers feel safe while shopping is another challenge. And since this is a major concern in the mind of the consumer, retailers should place considerable emphasis on employing a reliable, watertight security system. A possible solution may be for a retailer to offer a buyer and seller protection system similar to what PayPal has for their goods and services.
Posted in Financial Services Post Date 06/13/2017