When Apple Pay was introduced it gave credence to the possibility of mobile payment being the future of payment systems. Although it is far too early to determine if it has succeeded, the consensus is mobile payment will eventually replace most, if not all other payment solutions: it is only a matter of time. However, a survey conducted by shopping website Retale.com of 1,000 consumers about their mobile payment preferences revealed Apple Pay and Android Pay faired much worse than PayPal and bank apps.
The sentiment of the survey respondents could have a lot to do with the current digital security environment. With so much news about successful security breaches, consumers feel safer giving their financial information to businesses that have more experience in this segment. Granted some of the organizations that have been hacked are banks, but as a whole there is a perception out there they have better security protocols in place.
In the survey, the biggest concern by consumers was data breaches and privacy issues, which was voiced by 59 percent of the respondents. Fifty five percent also said they are worried about the possible loss of or theft of their mobile device.
These very real concerns are driving consumers to brands they know, and according to the Retale.com survey, half of the respondents said they are more likely to use PayPal if they were going to make an in-store payment on a mobile device. Another 27 percent indicated they would be more likely to use their bank’s mobile payment applications. Apple Pay and Android Pay received 20 and 17 percent respectively.
“PayPal and mobile banking apps still own the mobile payments market,” said Pat Dermody, Retale’s president. “As shoppers grow accustomed to using services like Apple Pay and Android Pay, those numbers will shift but there might be too much fragmentation to drive significant increases [in existing consumer preferences]—at least in the short term.”
An obvious solution maybe what consumers in the survey have suggested, which is for retailers to start supporting an in-store mobile payment option in their stores. This sentiment has increased from 57 percent last year, to 63 percent this year.
Even though the trepidation in using the solutions from Apple and Android is there, in-store mobile payment use by consumers is growing. The rate has increased from 36 percent last year, to 43 percent this year.
As Dermody explained, there is too much fragmentation in the market, and it is going to take a lot of effort from the tech companies to drive consumers to their mobile payment systems. But in the meantime banks and retailers will be offering their own platforms, which may end up being too much of a lead to overcome for other players.
Edited by
Maurice Nagle
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