The Federal Reserve Bank of Boston recently conducted a survey of financial institutions regarding payment topics. One of their queries asks bankers what is impeding the adoption of mobile payments. Although acceptance concerns and the lack of loyalty and rewards may play their part, this survey suggests that concerns around security is the greatest deterrent to consumer adoption. As Digital Transactions reported:
Fifty-one percent of banks and credit unions cite security concerns as a “high” barrier to consumer adoption, according to a report released Friday by the Federal Reserve Bank of Boston. Another 35% rate these concerns as a “medium” barrier, and only 14% call them a “low” barrier. No other barrier rates are as high in the survey, which consolidates results gathered in 2016 from 706 financial institutions across seven Fed districts.
The prevalence of these concerns is leading bankers to suggest that mobile payment adoption, at least in the U.S., is going to be a slow slog. This is despite the enormous efforts, not to mention monetary investments that financial institutions have made:
As a result, the horizon for mass adoption of mobile payments continues to recede. Among all 706 responding institutions, 80% said it will take anywhere from three to five years for the service to achieve “industrywide consumer adoption” at the point of sale. For in-app and mobile Web usage, 75% cite the same time span.
Financial institutions could improve the promotion of their security features, but the continuing headlines regarding new data breaches where personal information, (sometimes including payment details) are stolen drowns out the message. A link to the Fed’s report can be found here.
Overview by Sarah Grotta, Director, Debit and Alternative Products Advisory Service at Mercator Advisory Group
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