Research Shows Consumers Want Mobile Payments
Most of us don’t need data to prove that today’s consumers can’t live without their cellphones. A quick scan of your local coffee house, mall, or gym locker room solidifies that theory. However, two new pieces of research show that a significant number of consumers are ready to do more than tweet about the killer shoes they just bought—they want to use their phone to buy them.
New research from Parks Associates, www.parksassociates.com, found 37% of U.S. mobile phone owners find the mobile wallet concept appealing, with interest highest among younger households and smartphone owners. It also found that more than 50% of U.S. broadband households want the ability to scan barcodes for product price and promotional information on their next mobile phone.
According to the Parks report, various mobile payment technologies, including the emerging NFC-based retail mobile wallet solutions, processed more than $10 billion in transactions in 2011 in the North American market alone, with consumer interest in mobile payments steadily increasing. Harry Wang, director of mobile and health research, says consumers are most attracted to the convenience of mobile payments, eliminating the need to carry cash or credit cards and offering the option of digital receipts.
Another study released recently had similar findings. A report published by the Consumer Electronics Association (CEA), www.ce.org, found more than one-third (37%) of mobile device owners are engaging in some form of mobile commerce—either shopping and/or purchasing online or in-store, using and/or redeeming coupons or gift cards, or searching for coupons. CEA also found that, on average, each consumer plans to spend $575 on mobile purchases in the next 12 months.
CEA said that although most online purchases are done without mobile devices, those engaging in mobile commerce average more than one-third (35%) of all online transactions. The categories most often browsed/shopped for on mobile devices are consumer electronics and clothing/footwear, while music and books are the categories most often purchased. One-third (32%) of consumers engaging in mobile online purchasing have bought consumer electronics online using their device.
To put this in market perspective, CEA estimates that nine out of 10 U.S. consumers own a tablet, smartphone, or cellphone, translating into 216 million mobile device owners. Jessica Boothe, manager of strategic research at CEA, said that as the number of mobile devices continues to grow, mobile commerce “will play a more integral role in the everyday shopping habits of consumers, especially as they continue to seek bargains and comparison shop.”
CEA also found that 27% of consumers are comfortable using the mobile Internet because they trust current authentication safeguards, and 25% feel comfortable because they trust their information is safe and secure. However, CEA did find more than one third of the consumers who haven’t made a purchase with their cellphone are hesitant to do so because of security concerns. While 42% of mobile consumers agree that fingerprint is the best way to authenticate mobile purchases, another 24% are not sure as to the best method.
“Consumers want assurances that their personal information is 100% safe and secure,” Boothe said. “They are not fully confident in technologies available.”
As Boothe suggests, in order for mobile commerce to truly penetrate the market, new and advancing technologies need to focus on providing a secure payment experience, and perhaps more importantly, communicate that to the consumer.