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Mobile payment – will it ever take off?

With technology ever evolving, we find ourselves asking…what next? Now mobile payment is by no means a new concept – but it is only now, three years after Google Wallet launched, finally gaining some traction in the face-to-face mobile payments market with the recent introduction of Apple Pay.

Shopping using mobile technology has been an ever increasing trend with 50 percent of purchases now made via a mobile device according to a study by Synchrony Financial. However, using your mobile as ‘the’ payment device to make face-to-face transactions and to replace your leather wallet has been a much slower transition.

Mobile payment – why the slow adoption?

Financial experts have narrowed the reason for this lack of adoption and consumer reluctance down to four core concerns:

1. Confidence in security and data privacy

The question of security is high on the list of concerns but mobile payment platforms meet the same PCI compliance standards as other forms of payment and they can also use additional security measures such as one time encrypted codes to transfer card information. This means card information is not being passed through the merchant POS, keeping private financial information safe and secure. These measures combined with the iPhone 6 itself using Touch ID technology to access and approve mobile payments makes the system even more secure.

2. Lack of motivation – current payment systems are already convenient

The way consumers have been purchasing goods has changed significantly over time. Swipe, chip & pin and most recently contactless payment already provide a convenient and secure service – so what does mobile payment have to offer that will entice the consumer to switch?

3. Added value and benefits

Consumer uptake of mobile payments will be directly related to the value added from using mobile phones instead of the leather wallet. To achieve this added value retailers need to instill a level of customer loyalty through new mobile payment initiatives; the standard points collection and 2-for-1 offers will no longer be enough.

There needs to be a shift in focus to the individual user experience and one-to-one personalised customer engagement to provide what the modern shopper has come to want and expect. Currently the only company to successfully roll out a mobile payment system is Starbucks, which launched in 2011 and now has 10 million users. The implementation of a user friendly mobile payment system combined with a consumer engaging loyalty scheme provided the perfect recipe for success.

“No single competency is enabling us to elevate the Starbucks SBUX -0.49% brand more than our global leadership in mobile, digital, and loyalty. Starbucks is a clear leader in mobile payments and we are encouraged by how consumers have embraced mobile apps as a way to pay.”-Howard Schultz, Chairman and CEO, Starbucks, 2013.

4. Merchant preparation

Its not only consumers who are slightly hesitant in the uptake of mobile payment, not all retailers are completely prepared either. A recent study reported that even stores participating in Apple Pay are unable to complete transactions, with 47 percent of all Apple Pay users unable to use the method in at least one transaction. Encouraging merchants to install NFC terminals and train their staff has been met with significant reluctance. “Apple is gradually adding more merchants, but [it] definitely needs to break into more large merchants to really take off,” Shirley Inscoe, a senior analyst at Aite Group. The continued lack of technology infrastructure available will limit consumer adoption. If there are not enough retail outlets and restaurants providing mobile payment as an option then it will not become an automatic payment method for the consumer.

What does the future hold – Apple Pay

Will the introduction of Apple Pay take mobile payment to new heights of adoption like Apple did for the tablet industry with the launch on the iPad? Surely if any company can make mobile payment succeed and ensure consumer adoption it’s Apple.

Apple has at least seen some early success, since its launch in the US in October 2014 it is estimated that 12.2 million iPhone 6 owners used Apple Pay between November and February for purchases at least once. Whether Apple will continue to build on its US success in the UK and in other countries in the future is yet to be seen. However, consumer fears about mobile payment security can easily be alleviated – and if organisations focus on adding significant value through loyalty initiatives then using mobile as a form of payment will become second nature to consumers in the near future.

How imageHOLDERS can support your mobile payment business needs

imageHOLDERS is always ahead of the game when it comes to new technology and we have been keeping a close eye on new mobile payment devices. Therefore, when you require mobile payment in your store, restaurant, leisure facility or offices, we have already got it covered with our iPad and tablet kiosk enclosures, available with device integration options. No matter what tablet and payment device combination you require we are able to provide the perfect secure solution to meet your business needs.

For more information

Talk to a member of our team today to find out the tablet enclosure to best suit your purposes and let us answer any questions you may have. If you can’t find what you’re looking for, it’s likely we’ll be able to create it so call us on 01202 892 863 (UK) or 1-888-858-9778 (US). Alternatively you can email [email protected].