With mobile payments on the horizon and much media coverage in recent weeks about new product launches (e.g., PayPass Wallet Services), a logical question emerges: Why would consumers choose to adopt this new technology?

The reasons for adoption—as well as its timing—vary widely by market. There are, however, some common themes. In completing the analysis for the MasterCard Mobile Payments Readiness Index (MPRI), we found two distinct reasons why consumers are interested in mobile payments.

In markets like Nigeria and Kenya—the developing world, if you will—mobile payments provide access to a financial system that may not exist or is not widely affordable, leaving consumers heavily reliant on cash. Both Kenya and Nigeria score extremely high in consumer readiness on the MPRI—number one and two, respectively. As the graph below shows, Kenyan and Nigerian consumers are very willing to use mobile payments; 60 percent of Kenyans and 62 percent of Nigerians are receptive to this mode of payment. These high numbers make sense, given that in both countries, mobile payments meet a current and pressing need for a safe, accessible way to pay.

 

In the more developed parts of the world, where payments are a well-oiled machine, consumer adoption will be a convenience play—replacing plastic with a mobile device. On our MPRI, several of the markets in the developed world score fairly low in consumer readiness. However, this is nothing a little marketing can’t fix—assuming there are acceptance locations at which consumers can use their phones to pay.

Living in the United States, I can attest to the importance of convenience. When I run to the grocery store for a carton of milk, I think “if only I could bring just my phone instead of lugging my whole purse.” When I’m standing on line at a clothing store, I naturally play with my phone waiting for the line to advance; my phone is out, why can’t I just tap and go? And when my husband recently forgot to bring his wallet to work (note: he didn’t forget his phone), I wished he could use his phone to buy his train ticket and his lunch. At times like these, I think about how much easier it would be just to tap my phone and go, rather than digging through my purse for my wallet, pulling out my card, and (finally) swiping. Admittedly, it may save only a few seconds, but every second counts—especially these days.

 

Topics: Payments Strategy