Security fears and hassle factor holds back mobile payments, Zapp study finds

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Consumers are being put off making mobile payments through existing providers by security fears, lengthy sign-up processes and problems making payments outside of individual schemes, according to new research published today by Zapp. 

The survey of 2,000 British consumers, carried out by ICM and commissioned by Zapp, found just 17% of consumers have made a mobile payment and the majority (60%) of these payments were limited to simple bank transfers between accounts rather than paying for goods and services.

Respondents were asked which factors prevented them making mobile payments, with half saying they saw current mobile payment options as a security risk and one in 10 saying complex registration processes put them off. 

Of those already making mobile payments, one in five (20%) said there are not enough people and places to make payments and 18% said it was difficult to pay people who don’t use the same mobile payment system.

Simplicity needed

However, the study also found a strong appetite to pay for a wide range of items if a simple system using existing bank accounts and mobile phones was available that didn’t need additional registration. 86% of those already making mobile payments said they would make more payments with such a system. In total 40% of all respondents said they would use this type of payment system which is  a 33% uplift from a similar study conducted in February 2013, which demonstrates the fast growth in interest in paying via the mobile phone. The figure was even higher for the 25-34 age group (the demographic most likely to make mobile payments), with 55% saying they would use it.

Peter Keenan, CEO, Zapp, said: “The research paints a picture of pent up demand and frustration. People want to pay with mobiles, but they need to be convinced that payment is secure, and it has to work everywhere and be totally hassle free.  History shows us that mass adoption always follows trust and convenience, which in turn is enabled by cooperation. 

“We’ve seen these kinds of interoperability and availability issues frustrate people and slow down adoption before – for example in the early days of ATMs when you could only withdraw money from a cashpoint owned by your bank, or when mobile operators charged high amounts to call someone on another network.

“For mobile payments to really take off, it’s clear banks and retailers need to work together more closely – using their brands to win trust and making it easier and more convenient. We are hugely excited that Zapp’s digital first payment ecosystem will offer much greater levels of security, trust, interoperability and availability than what’s currently available when we launch 2014.” 

Of those who said they would use their mobile to pay, the top things they said they would be comfortable paying for were: online shopping (69%); groceries (59%); entertainment purchases (gigs, cinema, tickets etc) (55%); and more than half (54%) would pay bills (eg utility) using their phones.