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Vantiv Research Finds Disconnect Between Consumers and Payments

Recent payments industry research sponsored by Vantiv and executed by Mercator Advisory Group highlights a number of areas where payments stakeholders, including consumers, may be out of sync with one another. During 2012, the Vantiv Insight Series research conducted a major consumer survey on payment topics with 1,200 consumers, followed by executive interviews with leading merchants and a diverse array of financial institutions.

As noted during a recent webinar based on the research, one key area is the emerging field of mobile payments. From PaymentsSource: 

Consumers want more value out of using a mobile device for payment, seeking digital receipts, product information and comparison pricing, says Peter Kulik, vice president of product strategy and innovation at Vantiv. However, executives tend to view mobile payments as “electronic plastic,” or simply an extension of card-based transactions, Kulik adds.

“To us, this is a key disconnect between executives and consumers because consumers are saying a key barrier to using mobile payments is that cards are very easy to use,” Kulik says.

If a mobile payment application does nothing more than allow a payment, the consumer will likely continue to pull a plastic card out of a wallet, Kulik says.
“There would be no reason for paying through a mobile device,” Kulik says. “But the great opportunity here for executives is to develop applications with a broader role in the whole shopping experience.”


In other findings, it was noted that both FIs and merchants tend to underestimate the effects of account-based and transaction-based fees in shaping consumers’ choice of tender types:

Ken Paterson, vice president of research operations at Mercator, says bank and retail executives believe consumers regard convenience and rewards as the most important factors for adopting mobile, but consumers surveyed indicated their main concern was the cost of conducting mobile payments.

“Consumers feel that ‘surprise fees’ create a bad experience, so the potential disconnect here is that executives should not underestimate the effect of raising fees on transactions or processing,” Paterson says.


Uncertainty regarding the deployment of mobile payments is creating anxiety and planning challenges for both FIs and merchants:

Retailers are not sure that NFC will be the winning technology, but NFC represents a long-term strategy for mobile pay development, Paterson says. “In the meantime, that’s why other simpler technologies are out there getting usage,” he adds.

Rather than fear the uncertainty of which mobile technology may ultimately take hold, executives should view the various options currently in use as a positive, Paterson says. “These are all getting people used to seeing others use their phones to make payments,” he adds.

More data from the Vantiv Insight Series research, including a white paper associated with the webinar, can be found here. Click here to read more from PaymentsSource.

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