Education is the biggest barrier for mobile payment adoption, says Dwolla

m-payments are safer

Consumer education is the largest barrier facing mobile payment adoption, according to Dwolla’s communications director, Jordan Lampe. His comments come as a raft of startups begin to compete in a space also occupied by giants such as Google with its Google Wallet service, suggesting that innovation still remains ahead of consumer adoption. However, Lampe tells StrategyEye that while consumers have concerns over the safety of mobile payments, it is safer than more traditional modes of payment.

When you get down to it, it’s much easier to take a picture of the 16 digits on the credit card, or write it down, or skim it with those big skimmers – you don’t even need to get that technical. Logging into your phone, typing in a pin, sending transactions that have no sensitive financial information attached or embedded within it, that’s a safer process,” he says.

However, firms do face a challenge in overriding concerns regarding mobile payments security. A report from Javelin Strategy and Research in December claims that just a third of consumers have used their device for financial transactions, with a further 30% that they are afraid of sharing financial information using their mobile. Meanwhile a YouGov poll last year shows the extent of anxiety in the UK, with just 13% of consumers saying that they are willing to make mobile payments. Despite this, eMarketer claims that consumers are coming round to the concept of using their device for transactions, forecasting that US mobile commerce revenues will hit USD11.6bn this year, before hitting USD31bn by 2015.

While user concerns regarding security remain, the mobile payments market appears poised for growth in the coming months as consumers snap up smartphones at an increasing pace. Companies are assembling mobile payments services, tackling a range of different angles, from merchant services to consumer mobile wallets to mobile banking. Dwolla, which provides mobile payment software for merchants and consumers, is registering transaction volumes of between USD30m and USD50m per month in the US, according to Lampe, who adds that the firm has no firm plans to expand outside of the country yet.

There’s still a lot to work on and innovate stateside. There’s a lot more room for disruption over here,” he says.


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