Concerns over security and a fragmented market are putting consumers off making mobile payments, according to a report.
A survey of 2,000 UK consumers by research firm ICM, and commissioned by Zapp, showed that only 17 percent have so far made a payment via a mobile device. Also, the majority of these transactions, 60 percent, are simple bank transfers between accounts, as opposed to making purchases.
The main reason for consumers not wishing to use a mobile payment system is due the perceived security risks, with 50 percent highlighting this as a concern.
Meanwhile, one in ten said that complex registration processes for mobile payment services put them off.
For those that have already made mobile payments, 20 percent said that there were not enough places that enabled payments to be made, with 18 complaining that it was difficult to pay people who don’t use the same mobile system.
The study also highlighted that 86 percent of respondents would be willing to use a mobile payment service if problems were resolved.
Commenting on the survey, Peter Keenan, CEO, Zapp said: “The research paints a picture of pent up demand and frustration. People want to pay with mobiles, but they need to be convinced that payment is secure, and it has to work everywhere and be totally hassle-free.
“History shows us that mass adoption always follows trust and convenience, which in turn is enabled by cooperation.”
Backed by Vocalink, a consortium of retail banks in the UK, Zapp is developing a payments application linked to customer’s bank accounts. The digital payment platform is set to launch next year, and will run on Oracle infrastructure.
Keenan added: “For mobile payments to really take off, it’s clear banks and retailers need to work together more closely – using their brands to win trust and making it easier and more convenient. We are hugely excited that Zapp’s digital first payment ecosystem will offer much greater levels of security, trust, interoperability and availability than what’s currently available when we launch 2014.”
An interim report released by UK regulator the Financial Conduct Authority last month highlighted that security is one of the main risks that banks and payment providers must face in order to ensure that consumers benefit from the expected boom in mobile payments, citing concerns around malware and fraud.
Barclays has led the way in mobile payments in the UK, which has been slow to adopt the services in comparison to other countries, though its Ping-It service has up until now focused on money transfers rather than payments.
Others such as Visa Europe are also preparing to offer services that can be offered by UK banks, and yesterday announced a partnership with IBM and Monitise to develop its payments platform. Visa predicts that over half of all of its transactions will be conducted via mobiles by 2020.