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    Convenience will drive UK adoption of mobile and contactless payments

    More than 40% of British consumers say they would use their phone to make payments — and ease of use would be their main reason for doing so.

    SIMPLICITY: Ingenico's research found consumers are keen to embrace mobile payments and that they value convenience over security

    SIMPLICITY: Ingenico's research found consumers are keen to embrace mobile payments and that they value convenience over security

    Convenience, rather than security, is set to drive widespread adoption of new payment methods, an independent survey of 1,000 British consumers has found.

    The research, commissioned by terminal supplier Ingenico, found that shoppers already like the idea of using their mobile phone to make payments and supports the idea that contactless transactions could prove a viable alternative to cash in the UK.

    Respondents were questioned about contactless prepaid cards, contactless debit or credit cards and mobile handset payments. Overall, 41% of respondents said they would consider using or would definitely use their phone for payments and the top three benefits were cited as convenience, a reduction in queuing times and a preference to carry less cash and cards around. Only 12% of respondents saw the improved security of mobile payment as a benefit — and their answers included some surprising findings:

    Attitudes to cash — On average, survey respondents had £29.30 in their wallet/purse on any typical day and consumer tolerance in relation to cash loss is high, with the respondents saying they would need to lose and average £71.30 cash before reporting it to the police.

    “This points to a surprising under-valuation of significant amounts of money,” say the researchers, “and illustrates that consumers interpret and relate to traditional cash, in terms of its disposal/loss, very differently to other payment mechanisms. High levels of personal control and ownership of risk related to cash appear to be an accepted trade-off. Thus cards, being a bank-oriented device, result in consumers perception of risk sitting with the bank. Interestingly this picture could change in the future once mobile phone based payments are more widely adopted as mobile phones are seen very much as personal property.”

    Simplicity and convenience are key — When it comes to payment, consumer preference for simplicity and convenience are paramount considerations. One-third (33%) of shoppers would rather use cards than dig out change from their pocket, while 26% of all respondents viewed a single card to replace their existing cards as a desirable aspiration.

    FIGURE 1: Approach to payment methods. Source: Ingenico Paypolls Survey 2009. Click to enlarge

    FIGURE 1: Approach to payment methods. Source: Ingenico Paypolls Survey 2009. Click to enlarge

    Security is not a top priority — Payment security is not a top priority for consumers using mobile technologies. Instead, shoppers viewed convenience as the primary benefit (62%) with only 8% citing increased security as an advantage. “Ease-of-use outweighs the consideration of risk issues when convenience is a measurable gain,” say the researchers.

    Consumers are willing to make high value mobile transactions — Although the current limit for contactless card payments in the UK is set at £10, respondents said they would be willing to use a mobile phone to make purchases valued on average at £30.10. And, for those who indicated they have or would use mobile payments, it was the most popular option for transactions valued at between £10 and £49.

    FIGURE 2: Benefits of using mobile handset technology. Source: Ingenico Paypolls Survey 2009. Click to enlarge.

    FIGURE 2: Benefits of using mobile handset technology. Source: Ingenico Paypolls Survey 2009. Click to enlarge

    “Confusion related to usage — for example, how transactions are executed (appearing on mobile provider bill or bank statement) and transaction charges — associated with mobile phone usage, eg SMS charges — may underpin the lower shopper preference for using mobile handsets to undertake sub-£10.00 purchases,” say the researchers.

    “While shoppers view engagement with any payment technology as a potential entry point into wider personal financial data, respondents confirm that the perceived benefits of ease-of-use, timeliness, and convenience will outweigh such security considerations when undertaking payment transactions,” the researchers conclude.

    FIGURE 3: Average spend by those who have/would use mobile phone payment technology. Source: Ingenico Paypolls Survey 2009. Click to enlarge

    FIGURE 3: Average spend by those who have/would use mobile phone payment technology. Source: Ingenico Paypolls Survey 2009. Click to enlarge

    “It is clear however that consumers’ desire for speed and convenience at the point of sale is likely to drive contactless card and phone payment technologies,” they say. “While strong word of mouth seems likely to ease the introduction of these technologies due to the benefits, this may be mitigated somewhat by the currently low awareness levels. Further education of consumers regarding these technologies may therefore be necessary to accelerate adoption.”

    “Adoption of contactless and mobile payments in the UK is going to be fascinating to watch, as it is being consumer-driven,” says Gregor Rankin, marketing manager for northern Europe at Ingenico.” British shoppers want speed and convenience at the till and they see how these new payment methods meet their needs. Retailers can also expect to benefit, as increased footfall is one of the recognised advantages of implementing contactless.”

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