Security concerns among consumers over making payments on smartphones and tablets are falling dramatically worldwide as people become more familiar with paying for goods and services on mobile devices, according to new research from mobile ad network BuzzCity. The report claims the number of people expressing fears over mobile payments has fallen from nearly a third to just 3% over the past year. This in turn is leading to growing use of the technology, with certain regions such as Asia seeing particularly strong, with more than 60% of mobile owners in Pakistan and Bangladesh already making mobile payments, according to the study. However, Buzz City CEO KF Lai warns that while trust in mobile payments is increasing, further education is required to further boost consumer confidence over the next few years.
“The fear factor has gone down,” says Lai, speaking to StrategyEye. “Consumers are just getting more familiar with using their mobile – especially after a few years of using app stores.”
The findings will come as welcome news to retailers and mobile payments companies. Although companies such as Square and PayPal continue to report solid growth in mobile transactions, many see winning consumer trust as the final barrier to the market reaching its potential. The mobile payment industry is expected to see remarkable growth over the next few years, with estimates from IDC suggesting that the mobile commerce market will be worth USD1 trillion by 2017. According to a separate report from Forrester, the US mobile payment market is set to grow by more than 600% over the next four years, with the research firm predicting that while VC investment in and consumer adoption of the technology has so far been limited, this is about to change. This increase will come as adoption of mobile payment technology in shops and restaurants rises, boosting not only consumers’ willingness to shop on smartphones and tablets, but their ability to do so.
The growing audience on smartphones and tablets means that advertisers are also starting to expand their budgets for mobile. Buzz City claims the volume of ads served on its mobile ad network increased nearly 70% last year, with the firm serving 210bn paid ads in 2012. Advertisers have lagged behind consumers on mobile so far, with many still grappling with adapting to marketing on smaller screens and calls being made for a standardised way of measuring reach before they invest in the platform. Lai says the firm expects revenues to climb between 30% and 50% over the next 12 months.
“With online it took almost 10 years to close the gap between consumer usage and ad spend, but mobile supply and media consumption have increased so quickly that it will take just a few years to close,” he says. “The factors include whether the advertisers themselves are familiar enough with the mobile medium for them to spend substantial money. It will probably take between three and five years to close the gap on mobile.”
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