Mobile payments may overtake cards in five years

Discussion
Feb 24, 2015

At least in the U.K., a third of consumers expect smartphone payments to outpace credit and debit cards by 2020, according to a survey from Experian.

Sixty-seven percent of respondents feel cash will decrease in popularity over the next fives years, while two in five (41 percent) think there will be a decline in the use of credit and debit cards. The "Banking Moving Forward" study was based on 2,004 online interviews of U.K. adults last August.

Unsurprisingly, the main reason smartphone payments are not currently the preferred method of payment is a fear of fraud. Almost half of respondents (46 percent) feared their identity might be stolen online while 60 percent had no malware protection on their smartphone devices.

When asked about how other forms of payment could fare, four in five (80 percent) said that secure online payment platforms, such as PayPal, that let people shop using their debit card, credit card or bank account without sharing their financial details, will become more popular by 2020.

Other expectations around payments by 2020:

  • Fourteen percent believe that biometrics, such as retina or fingerprint scans, could become commonplace;
  • Two in five (44 percent) would be prepared to make payments via biometric scanning;
  • A fifth (19 percent) would consider paying for goods and services using voice authentication.




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In its 14th edition of Technology, Media & Telecommunications (TMT) Predictions, Deloitte forecast that in-store smartphone purchases worldwide will increase by more than 1,000 percent this year versus 2014. Citing a "tipping point" situation, Deloitte said 2015 will mark the first year in which the multiple prerequisites for mainstream adoption — satisfying financial institutions, merchants, consumers and device vendors — have been sufficiently addressed. In 2015, about 10 percent of the base of smartphones worldwide will be used to make an in-store payment at least once a month, compared to less than half a percent (led by early adopters in Japan) of about 450 million smartphones in mid-2014, the report predicted.

A recent survey of more than 1,000 consumers by Placeable, the location-based marketing company, found, however, that although approximately 70 percent of respondents trust mobile payments, only nine percent have used mobile payments even when they are available. Consumers said they don’t see a reason to use them and Placeable suspects specialty promotions, discounts and loyalty programs will be required to convince shoppers to try mobile wallet.

Do you see 2015 as a breakout year for mobile payment adoption? What hurdles do you see? Will biometric scanning be a decisive ingredient in winning over consumers?

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15 Comments on "Mobile payments may overtake cards in five years"


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Diana McHenry
Guest
6 years 3 months ago

As a consumer, mobile payments have been easier already in 2015. I’ve been delighted in my work travels this year to have more options. Merchants are making it easier to use alternative payments. Education, ease of use and reducing fear of fraud/theft are keys to adoption. People in their twenties and people comfortable with technology will tip the scale on adoption.

Nikki Baird
Guest
Nikki Baird
6 years 3 months ago
I don’t see 2015 as a breakout year, even though I would like to. I like Apple Pay, and I’d be happy to use it, but even in stores that take it it’s not guaranteed that I can use it at every register (as I have found out at Panera). If I can’t be guaranteed that I can use it when I want to, all that will do is discourage me from making the attempt—especially when there is a line of people behind me. That problem of “universal availability”—the catch-22, really, of every consumer needs to have it before retailers will adopt it and every retailer needs to have it before consumers will adopt it—continues to be the biggest hurdle. But I do agree that more promotion, even just plain awareness, is needed. For example, with Apple Pay, if I were them I’d hand out about 50 million little Apple Pay logo stickers and have retailers put them on every device that accepts it. And on the front doors. And anywhere else that makes sense.… Read more »
W. Frank Dell II, CMC
Guest
6 years 3 months ago

Just as online shopping took years for consumers to trust the seller/webpage, so will mobile payment. At this point we have competing applications. Until one gains real acceptance it is still anyone’s game. 2015 will not be the breakthrough year. Consumers have real security concerns. Mobile payment supported by a credit card will likely come first, and without additional security mobile payment by debit card will be years away. I would expect to see 2018 to be the breakthrough year.

David Dorf
Guest
6 years 3 months ago

With the announcement of Google taking over Softpay (formerly known as Isis), mobile payment is becoming a two-horse race with Google and Apple breezing past Paypal, Square and MCX. Samsung working with LoopPay is the darkhorse. We’ve turned a corner this year, but we’ve a long way to go before mobile payments are mainstream.

On the biometrics front, my bank already accepts a PIN, voice, facial recognition or my fingerprint for authentication on my phone. Of those, the fingerprint seems easiest and most secure. I imagine people will experiment with others as well. It all adds up to better security and convenience.

Ed Rosenbaum
Guest
6 years 3 months ago

A breakout year? I am not sure if this is. But it certainly is bringing awareness to what is going to be the future. There are still many shoppers in the older years (me included) who maybe do not understand mobile payment and will see it as a danger to their privacy rather than the wave of the future.

Mohamed Amer
Guest
Mohamed Amer
6 years 3 months ago

2015 will be another year along the journey to inevitable mobile payment adoption.

One might think that headlines spouting credit card breaches in retail would motivate and accelerate the move to mobile payments, but reality is that any lack of consumer trust at checkout transcends mode of payment (cash excepted).

Greater consumer awareness and education will propel demand and force retailers to adopt mobile payment options at faster pace. A breakout year? Probably not, but I’ve been surprised before.

Peter J. Charness
Guest
6 years 3 months ago

Breakout no, journey yes. I think mobile will continue to pick up speed if convenience, functionality and of course security really outstrip plastic. A credit card is pretty quick and easy to use, even at Starbucks it’s 50/50 whether to use the app or my card. The card is pretty quick, and I don’t have to search for the app on my phone (full of apps), but the card doesn’t show me rewards, so there is an additional benefit to the app (which is unique to Starbucks and may not be available in other types of payments yet). Biometrics adds to my comfort level yes, but really convenience and functionality comes out on top.

Tony Orlando
Guest
6 years 3 months ago

If and when the credit card terminals can accept all these new wallet-type payments with ease, and at a fair rate, then yes, you will see things change. Our store is looking into new terminals, as the microchip credit cards must be in place by 10-1-15, so adding the mobile payment system to it should not be difficult to do, and hopefully the transition will go smoothly. We’ll see.

Joel Rubinson
Guest
6 years 3 months ago

A bit too soon. Also, the first article cited is quite off-putting…how can you ask consumers about behaviors in 2020…really?

RIchard Hernandez
Guest
6 years 3 months ago

I really like where mobile pay is going. Even things like Square has made it easy for vendors in open air farmer’s markets to take credit cards. I think it will be some time for full adoption—change in consumer minds, change in devices and technology and retailer’s education will need to fully in board to make it work. I for one would like to leave house without having to worry about carrying cash….

Gordon Arnold
Guest
6 years 3 months ago

The need for secure wireless communication is where the decision to participate is located. Waiting for a moment in time is of no value. The cost for secure wireless is being delayed by the communication capabilities each business has in place. Much of the wireless communication in use was designed with never being upgradeable to the needs for retail security in transaction processing.

It is going to take more than one year to find a frontrunner with the needs we now have. And several more to proliferate the market. By that time there might other devices in play or enhancements to cards that are easier to use and defend, making the evolution of wireless much less than necessary.

Kai Clarke
Guest
6 years 3 months ago

Perhaps this year will be a breakout year for mobile payments. However, in the next 36 months (or 3 generations of smartphones), we will definitely see this become a widely accepted standard. As more devices support near field communication, this will replace more credit cards. Especially as more of these devices include full fingerprint recognition (a la Samsung and Apple), for enhanced security.

Ralph Jacobson
Guest
6 years 3 months ago

Whatever the technology that the world settles on, I believe the next five years will definitely show a majority of cashless/cardless payments. Another article shares a recent move incorporating beacons and contactless payments in the Middle East. Biometrics may take longer to adopt globally. Remember how many decades we’ve been talking about a cashless society?

Martina Olsen
Guest
Martina Olsen
6 years 3 months ago

I don’t think biometric scanning will be the determining factor; convenience and functionality will be key. People like PayPal because of its convenience and the fact that it’s a trusted system.

If something works and there is no doubt about it, people may slowly choose to use mobile payment instead of using their card.  For smaller amounts, I have no doubt it will kick off. For bigger sums, I still think the majority of us are still wary of doing it without the direct connection of a bank card. But I may be wrong!

Dan Frechtling
Guest
6 years 3 months ago

Look elsewhere in the world and you’ll see where mobile payments have already overtaken plastic.

In Africa, the combination of remittance-based incomes, bank neglect, and cellphone availability have led to an explosion of mobile payments. M-Pesa, the leading service, is in 7 countries, has 17MM users, and handles $1B in transactions per month in Kenya alone.

25-30% of adults in sub-Saharan Africa have mobile-based financial accounts. This compares to the world average of 4-5%.

Why is this? Because these citizens don’t have the plastic habit. The number one barrier to mobile payment adoption is inertia around credit and debit cards.

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