Infrastructure still a hurdle for US mobile payments

The mobile payments revolution is coming! But slowly, it seems.

More than a quarter of those that can make mobile payments in the US are doing so, but low acceptance across stores and the number of older phones that cannot actually support payments means that paying on plastic still dominates. According to a new report from New York-based Auriemma Consulting Group (ACG), the growing number of mobile wallets available including Apple and Samsung Pay with more set to launch, is contributing to the growth but significant hurdles to adoption to remain.

ACG says 27% of those with a phone supporting mobile payments have used Apple, Android or Samsung Pay. As a share of all smartphone users in the region, the number is much smaller, with just 7% of US smartphone owners claiming to have “at least tried” mobile payments.

“It’s important to remember that less than half the smartphones that US consumers carry are capable of mobile payments,” says Marianne Berry, managing director of ACG’s Payment Insights practice. “Among those with an eligible phone, 27% of consumers we surveyed say that they have used Apple, Android, or Samsung Pay.”

If having the technology to make payments is a big part of the equation, then having places like shops and restaurants and other venues to actually make those payments is another. Some 39% of those polled in the survey said they would use mobile payments more if more stores accepted them.

With 61% of those polled saying they are using mobile payments to replace cash transactions, ACG suggests where phones are being used for payments it’s for smaller purchases. Indeed that is borne out by one third of those making mobile payments saying  they used mobile payments for a purchase of USD25 or less in the past week.

So to what extent are mobile wallets changing behaviour? By small increments, it seems. Only a third (31%) of respondents pay with a mobile wallet when they are in a store that accepts these payments, saying they “simply forget”.

“Reaching for the phone instead of the wallet isn’t an automatic reflex, even for mobile pay enthusiasts,” says Berry. “And even if they do remember, many will give up and use their plastic cards if they encounter friction at the point of sale, particularly if there are other shoppers in line behind them.”

That shouldn’t come as a surprise of course, unless you’ve been totally swept up in the hype around mobile payments. The truth is is takes a long time to change behaviour and when it comes to behaviour around financial services and payments, the pace of change is even slower. Right now mobile payments adoption is still being driven by early adopters, both on the user and a merchant side. Once mobile payments acceptance of different wallets is common place and all phones can make mobile payments the infrastructure necessary to win over the mainstream of customers will be in place – then comes the hard part.

“Overall satisfaction with mobile payments is quite high at 80%, despite complaints about low merchant penetration and inconsistent customer experience at point of sale,” Berry says, “But mobile payment has yet to reach the tipping point that will take it from novelty to norm.”


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