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Many of the new entrants in the mobile payments space must face one nagging reality: consumers still trust their banks and credit card companies to drive the mobile payments market. That’s according to new research from KPMG and mobile analyst Chetan Sharma as previously reported in MobileFI.
This doesn’t mean that initiatives such as Google Wallet, Square, Isis or PayPal are doomed to fail; most are already aligned with banks and credit card companies. But consumers’ embrace of mobile payments are seemingly smoother when led by a known financial institution (FI).
KPMG found that:
- When asked who they trusted the most with their mobile commerce financial data, 56% of respondents identified their FI; only 7 percent trusted retailers and 6 percent said they trusted their mobile/Internet service providers. Secure payment systems, such as PayPal, fared better, with 30 percent saying they trust them with their information.
- 72 percent rated the “brand/reputation” of the institution as very important in gaining trust with respect to data privacy and security.
- The percentage of people worried about data privacy and security concerns has gone from 75 percent in the previous survey to 90 percent now.
Sharma found similar results:
- 37 percent of respondents believed FIs were most likely to define the mobile payments and commerce space, up from a little more than 31 percent in 2011.
- Meanwhile, operators, Google and PayPal were well behind, with respondents expressing less confidence in their ability to define the payment market in 2012 compared to last year.
- Start-ups as a group got more backing from respondents in 2012 while Amazon and Apple showed up on the charts for the first time this year.
Given they are clearly in the mobile payments driver’s seat, FIs should not squander the opportunity.
FIs interested in maintaining control of their mobile payments initiative should download the Clairmail white paper, Mobile Payments: Driving New Revenue from the Mobile Channel.
“After several years of technology-driven expectations, mobile banking is finally seeing sustained traction in the United States, and banks have rolled out support broad enough to enable consumers with nearly any mobile device to access basic banking functionality,” said Brad Strothkamp, vice-president, principal analyst, eBusiness and Channel Strategy, Forrester Research. “As consumers gain confidence with the channel, their needs are shifting from simple functionality like account balances and ATM locators to transactions like bill payment and account transfers.”
