Handset Users Indicate Tepid Interest in Mobile Payments As Programs Launch

Experts may well have proclaimed 2012 to be the Year of Mobile Payments, what with digital wallets and other product introductions proliferating seemingly by the day, but at least some researchers are starting to ask a key question: Do consumers really want mobile payments? According to preliminary data, the answer appears to be either no or, at best, not yet.

“When we ask consumers, are they ready for mobile payments, the answer is, ‘not yet,’” said Kristen Korhonen in a presentation she gave of survey research on Monday at the Cartes North America conference in Las Vegas. Speaking to Digital Transactions News, Korhonen, a vice president at Paris-based research firm Ipsos, said her firm is preparing to conduct later this month a major study of consumer readiness for and interest in mobile payments. The results she presented Monday are based on a shorter, preliminary survey of more than 13,000 mobile-phone users around the world, including between 500 and 1,000 each in the United States and Canada.

What she has found so far is widespread apathy and confusion about mobile payments, particularly with regard to payments via near-field communication, a technology that enables handsets to conduct contactless payment transactions and receive offers at merchant terminals. In the U.S., just 21% of surveyed handset users are interested in using NFC to make payments, according to the research. Canadian interest is even lower, at 19%.

Nor is there strong consumer interest in using a smart-phone app to do person-to-person payments. One quarter of U.S. handset users indicated interest in this payment method, while 23% of Canadians said they had any interest.

Consumers who responded favorably to mobile payments did indicate a strong interest in receiving payment services from financial-services firms like banks. They also indicated a necessity for strong security, with most respondents saying they would require a “guarantee” of security before they would use the service, Korhonen said in her presentation.

It’s early days for mobile-payment technologies like NFC, and consumer sentiment may well change as users become more aware of services available via mobile-payment programs. But for now tepid interest among handset users is not a positive omen for providers like Google Inc., Visa Inc., and the Isis consortium formed by the biggest wireless carriers in the U.S., all of which are introducing services that will depend on NFC and will require strong consumer buy-in.

In this regard, a speaker who presented with Korhonen sounded a cautionary note. “We are reaching the peak of inflated expectations in the hype cycle and we’re about to hit the trough of disappointment, probably in about a year” said Christie Christelis, president of Technology Strategies International, Oakville, Ontario, Canada. One sign of these inflated expectations, he pointed out, is the sheer number of conferences now filling the calendar that are devoted to mobile payments.