Why consumers continue to resist mobile payments
Banks, retailers, phone and tech companies have spent millions of dollars developing and marketing systems that will allow us to make purchases using our mobile phones. All of this effort rests on a belief that buyers will arrive at the conclusion that paying by phone is faster and more convenient than pulling out a wallet in the checkout line and paying with cash.
Despite this massive technology push, only the smallest fraction of in-store sales are paid for by customers using mobile phones. According to data gathered by research firm eMarketing. the percentage of in-store sales in the United States made using mobile phones in 2015 was 0.02
Some of the reasons mobile purchasing has been slow to catch on include security concerns as well as doubts that mobile is faster or more convenient than paying with a debit or credit card. A Peter Eavis story in the New York Times provides a deeper understanding of this issue.
Adoption of mobile pay has also been slowed by technology hurdles. For example many mobile pay applications use a technology called near field communication or NFC. Many older payment terminals do not have NFC capability. This means that customers wishing to use their mobile pay app at those merchant locations will be out-of -luck.
Mobile pay services also may offer other services to allay security concerns. For example 2-factor authentication using a biometric can harden a purchase transaction to the point where it is sounder than cash.
Some services use technology that permits the phone to transmit a credit card payment without sending certain card elements to the store’s payment system.
But because federal law insulates credit and debit card holders from responsibility for most fraudulent charges, securing the mobile pay app may not be enough of an incentive to spur the growth of the market.
