Report: Consumers ready to make leap to mobile payments — with some help from retailers

New York -- Consumers are well positioned to make the transition to mobile payments — with a little help from retailers, banks, payment networks and retailers, according to a new report from global consultancy Kurt Salmon.



The report, “Why the Apple Pay Launch Means Mobile Payments Have (Finally) Arrive,” reveals that security is top of mind for active users of mobile payments. More than 40% of active users worry that their personal information is at risk when making mobile payments, while 37% believe that making an online purchase via smartphone is not secure.



“Apple’s entry into the field sends a clear signal that mobile payments are here to stay,” said Michael Archer, a partner in Kurt Salmon’s Global Financial Services practice and co-author of the report. “The business case is well established along the entire mobile payments value chain, but our survey results prove that banks, payment networks and retailers still have work to do to persuade consumers to change their behavior.”



Rewards and loyalty programs were the primary motivator for using a smartphone to make payments among 61% of active users. More than 60% of active mobile payment users regularly check their phones for discounts from local and national merchants, and 64% sign up for as many rewards and loyalty programs as possible.



The profile of active mobile payment users also shows convenience to be a powerful motivating factor in consumer adoption of mobile payments, indicating the importance of collaboration among banks, payment networks and retailers to ensure transactions are accurate, efficient and fast.



“Convenience presents a challenge, as few of the 9 million U.S. locations where credit cards are accepted can currently accept mobile payments,” Archer explained.



But the arrival of Apple Pay just ahead of next year’s mandated shift to EMV chip-and-PIN technology in the United States opens up new possibilities.



“Replacing or upgrading payment terminals will be costly — about $7 billion across the country, according to our analysis,” added Archer. “But the opportunity now exists for retailers, service providers and banks to consolidate their mobile and EMV investments into one upgrade.”



The report lays out a clear course ahead for mobile payments participants to drive widespread consumer adoption of mobile payments by seizing the opportunity presented by EMV, leveraging loyalty and rewards programs, and demonstrating the security of the technology.