Fraud fears holding back consumer acceptance of mobile payments
Fear of fraud is the main factor slowing the adoption of smartphone-based payments among UK consumers, though a third believes that credit and debit card payments will no longer be the preferred method of payment in 2020.
A new study, Banking Moving Forward, by information services specialist Experian found that half 46% fear identity theft online while 60% of smartphone users said they had no malware protection on their devices, leaving them vulnerable to hacking by cyber fraudsters.
“People will certainly be faced with more choice in years to come with the payment methods and providers they choose. Their decision will ultimately be based on the ability to pay for something, securely, anywhere and at any time at their own ease and convenience,” said Derek Garriock, head of business solutions at Experian UK and Ireland. “Security is a key concern for many individuals, who may be willing to adopt new ways of paying but have not yet done so, even amongst the younger generation. This is understandable considering that one in six adults has fallen victim to a cyber-attack via their mobile device.”
The study examines how people bank now and how they expect to bank in the future and found that that while cash and card payments still dominate, people believe that alternative methods of payment such as smartphones will become more widely used over the next five years. In this timeframe, 67% of respondents said cash will decrease in popularity, while 41% think there will be a decline in the use of credit and debit cards in their current form.
When asked about how other forms of payment 80% 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.
Looking towards 2020, 14% of respondents believe that biometrics, such as retina or fingerprint scans, could also become commonplace and 44% say they would be prepared to make payments via biometric scanning. A fifth (19%) would consider paying for goods and services using voice authentication.