Concerns over security, privacy and convenience could be stifling the widespread adoption of mobile payments, but those who do use their device for in-store payments have a higher average basket size.
On average, more than half of consumers are aware of mobile options globally, with it rising to 70% in western Europe. However, only a quarter of this figure are comfortable using their mobile device for in-store payments according to consulting firm, Bain & Company.
The Consumer View of Mobile Payments report also reveals that the mobile-spending group purchase roughly twice as much through digital channels, which include the mobile web and internet shopping, than mobile payment non-users.
The spend gap then widens when you look at specific countries. In the US and UK, users of mobile payments buy at least double the amount, whereas in France, Germany and Spain it is 30-60% more.
Reluctance to adopt
Despite information about the benefits of mobile payments being readily available, 40% of respondents who were reluctant to adopt, failed to see the need for changing their payment behaviour.
The same consumers may not hold a similar view for mobile banking though, which could pave the way for more investment in card-linked marketing. Annual growth of 59% for the first four years mobile banking was operational compared favourably to online banking’s 35% yearly increase for its first four years of existence.
Bain’s report suggests consumers can be persuaded to ditch their cards by promoting the value of mobile payments, such as faster checkouts, discounts and/or promotions, access to real-time balances and location-based marketing offers.
Communicating the benefits
Stephen Bertrand, partner with Bain & Company in London and head of the firm’s technology practice in EMEABanks, feels that retailers and alternative payment providers should be targeting consumers using demographical data based on their affinity to mobile payments.
“A mobile payment solution needs to start by defining the right proposition for target segments, as it’s unlikely to satisfy all segments,” concluded Bertrand.
“Consumers are voicing their willingness to change payment behaviors. It’s now up to mobile payment providers to deliver solutions that unlock the long-awaited potential of mobile payments.”
Demographics could include ‘Paranoids’ and ‘Non-Shoppers’ who are most concerned about payment security, ‘One-Stop Shoppers’ and ‘Impulse Shoppers’ that favour convenience and ‘Hobby Shoppers,’ ‘Reward Hunters’ and ‘Technophiles’ who react more to loyalty, offers and experience.