The security of mobile payments is the primary barrier that prevents consumers from adopting mobile payments, according to recent UK research conducted by the Auriemma Consulting Group (ACG). Improving the perceived security of both smartphones and mobile payments devices is essential to increase consumer adoption levels.
When consumers activate mobile apps or payments processes for the first time, they feel most secure when required to enter a username, password and either an authentication code from a card reader (rated 5.6 for perceived security out of 10) or email verification code (rated 5.2 for perceived security out of 10). Consumers are most comfortable with activation processes that are similar to what they use today for card based processes. Conversely, consumers are least comfortable when only required to enter a username and password (rated 4.7 out of 10).
When consumers check out via mobile payments, they feel most secure using an existing username and password, along with either a PIN (rated 5.3 for perceived security out of 10) or memorable word (rated 5.2 out of 10) unique to the app. Consumers prefer to have an additional layer of security specific to the app, over purely entering their existing username and password (rated 4.6 for perceived security out of 10).
35% of consumers would also be interested in customising their mobile security based on the amount of the purchase. If this was available, 50% of the consumers interested in customisable security would be more likely to make mobile payments. These consumers would expect and welcome additional security for larger purchases, which would both lower mobile fraud, and also help overcome consumers concerns about the security of mobile payments.
According to Matt Simester, Managing Director of ACG, ‘this research highlights that the barrier to mobile payments adoption is not necessarily technology or user experience, it’s about creating the right marketing messages to reassure consumers that this is a safe transaction channel. If mobile payments stakeholders truly want to increase the use of mobile payments they need to create segmented strategies based on sales ticket size and customer preference. They should also learn from existing card based processes which customers are already aware of and try to improve them – ultimately industry stakeholders will need to adopt more of the fraud risk themselves to increase the adoption of mobile payments.’
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