It’s Consumers Who Can Make Mobile Payments HappenChristina Sommer |
With any new technology there is always a chicken-or-egg discussion. What will it take for—name the product—to be successful? The same product adoption curve holds true with the discussion around mobile payments. The difference is, that mobile payments are not just a new technology entering the market, but there are also a host of new entrants to the already crowded payments value chain – mainly in the form of Mobile Network Operators (MNOs) and handset manufacturers.
I think it is fair to say that we are seeing a clear path emerge for mobile payments deployment—it may come in different shapes and sizes depending on the market. It is, however, beginning to happen, albeit slowly.
In that regard the agenda at this year’s Mobile World Congress in Barcelona had a greater focus on mobile payments and mobile commerce than in past years—less to do with value chain participants and more to do with adoption. While the ground work is being laid for mobile payments, there is still a missing link in the chain, which, in my opinion is the consumer.
The truth of the matter is that until consumers are ready for mobile payments, nothing significant will happen. The infrastructure can be perfect, the partnerships in place, but if consumers are not “there yet” it will not come to fruition. For example, in APMEA, 62 percent of consumers wait until a new product has proven itself before purchasing it, a shyness potentially explaining hesitation to use mobile payments.
MasterCard’s Mobile Payments Readiness Index, (MPRI) showcases these underlying consumer sentiments, by asking global consumers their familiarity and willingness to use mobile payments. There are six components used to score each market; Consumer Readiness is one of them and it is a differentiating feature. When you look at the Index scores, many markets score well on Infrastructure or Environment but few do well on Consumer Readiness. If you take the Canadian market as an example, Canada scored number two on the MPRI, but the missing element to propel mobile payments forward is consumers who are both familiar and willing to use mobile payments. Less than 20 percent of Canadian consumers are familiar with mobile payments.
Source: MasterCard Mobile Payments Readiness Index
Educating consumers on the benefits of mobile payments is the next step. Each market will have different application of how to accomplish this this. As long as the constituents – Payments Networks, Banks and MNO -come together in a cohesive fashion to educate consumers, adoption might not be that far off.