LOMBARD, Ill.—Another report shows that consumer fears over the security of mobile payments is holding them back from using a digital wallet.
Raddon Financial Group points out that although six in 10 consumers now own a smartphone, the number of in-store mobile payments in the U.S. has not kept pace.
“The October 1, 2015 EMV fraud liability shift is enhancing mobile point-of-sale payments and as a result, many in the industry promise a brighter mobile payments outlook,” said Pat Bator, Raddon senior research analyst.
Raddon’s National Consumer Research details the variety of reasons consumers cite for not using in-store mobile payments, including security concerns, greater ease in paying with cash or a credit or debit card, seeing no benefit in using mobile payments, and lacking trust in the technology.
Security concerns are the biggest barrier deterring mobile payment growth, despite the fact that mobile transactions can actually be more secure than traditional payment channels, Bator explained. Raddon’s report shows that 56% of smartphone owners won’t make mobile payments due to security concerns, and 45% won’t use a digital wallet due to cash and plastic being easier to use.
Raddon’s research found consumers fear someone intercepting their payment information or other data, getting their smartphone hacked, losing their smartphone or having it stolen. They are also worried about malware or viruses on their smartphones or companies misusing personal information. In fact, half of all smartphone owners who have not made an in-store mobile payment transaction said they hold all of these security concerns.
“If these concerns could be addressed, Raddon’s National Consumer Research found 24% of smartphone owners would be inclined to make an in-store mobile payment,” said Bator. “Further, 17% would be prompted to use their smartphone as a virtual wallet, replacing the payment cards they currently hold in their physical wallets.”