One of the key concerns merchants and their payment providers have in getting on board with new mobile payment systems is whether it’s reached critical mass yet. Like any new payment technology there are several moving parts which need to align for that perfect storm: user adoption; merchant buy-in; and a fast, simple-to-use and secure system from the OS providers and handset manufacturers. It’s an understandable concern and one which new uSwitch research helps to illuminate.
But the good news is that just weeks after Apple Pay was launched, a quarter of UK smartphone users already believe payments technology is a useful feature, while 13% rate it “must have”.
Security concerns
Consumer rights group uSwitch interviewed over 5,300 UK adults to compile its latest smartphone report. The results provide useful insight for ecosystem and handset providers. Some 75% of respondents said that with the launch of Apple Pay and the rise of other mobile payment technologies, security on their handset is more important than it was a year ago.
This is completely understandable and in line with consumer attitudes to payments in general. The biggest barrier to greater e-commerce and online banking adoption for years was consumers’ fear of cyber attacks. It was the same for the new contactless standard for fast tap-and-pay card present transactions at the till. Yet as users get more familiar with the technology and understand the safeguards built into these systems, adoption increases and fears are allayed. Worldpay announced in May that it had processed £2 billion worth of contactless payments since 2012, with transaction volumes increasing nearly 1000% over the past two years, for example.
In fact, uSwitch found that fingerprint scanning security, as featured on the newer iPhones and many Android devices, has become one of the most used pieces of smartphone functionality today. More than a third (34%) of iPhone owners now use this on a daily basis. It’s not the only security feature built in to Apple Pay, of course. Most notably it uses a tokenisation system whereby the user’s card details are never shared with the merchant – which reduces their PCI-related risk greatly.
The future’s mobile
Despite consumer caution over security, we think that the security measures built into handsets and systems like Apple Pay and Android Pay will be enough to reassure users. It’s why Visa and Deloitte are both predicting great things from the mobile payments industry. The global consultancy, for example, claims that a third of young people are interested in paying via smartphone, while the card giant predicts that UK mobile payments will hit £1.2 billion per week by 2020.
It’s also why Miura Systems supports Apple Pay in our mPOS devices. Mobile should be a real winner for merchants and their PSPs for several reasons:
Customer Experience: A slick and simple way to pay, offering more choice for your customers, means happier shoppers – and happy shoppers are more likely to return.
Queue busting: Speed up payments to avoid any drop-outs, maximising your takings.
Build your brand: For smaller stores, offering a cutting edge way to pay can help to raise your profile in the eyes of the customer while mobile payments can be tied into offering loyalty schemes
Security: As mentioned, security has been designed into systems like Apple Pay from the ground up, leveraging the inherent security values invested into EMV as well as enhancing with newer technologies such as tokenisation – to the point where it’s less risky (and expensive) than managing large quantities of cash payments.
