In an article titled Consumers Show Cautious Interest In Mobile Payments, Payments Source reports on one study of US consumers’ views on mobile payments which found that:
- Consumers are “clearly ready for a change,” as 27% of consumers “never” use checks.
- One in three U.S. adults is interested in mobile and Near Field Communication-based payments.
- 83% of respondents cited security as the most important factor affecting their interest in mobile payments.
- 62% of respondents prefer financial institutions to take the lead on new payment methods instead of wireless or Internet companies.
My take: Concluding that consumers are “cautious” in their interest in mobile payments is a misinterpretation of the data.
THE BLEPFARD EFFECT
First of all, concluding that, because one in four never uses checks, consumers are “ready for a change” misses the point: Consumers have already changed. They’ve shifted their payments behavior away from checks to debit cards, and yes, cash.
The other points, however, all relate to something I’ve called the Blepfard Effect (don’t ask me how I came up with that name):
Asking people to imagine a situation, a state of mind, or something that they can’t possibly imagine because they have no basis of experience to do so.
When we ask consumers about something that doesn’t exist for them — which, for all intents and purposes, mobile payments applies — we don’t, and actually can’t, get a reliable picture of future behavior.
Few consumers are interested in Near Field Communication-based payments because to the Average Joe on the street NFC = National Football Conference.
Many consumers cite security as the most important factor affecting their interest in mobile payments because they have no idea what it is, how it works, and don’t know what other factors should or could be affecting their interest in mobile payments.
A majority of consumers prefer FIs to take the lead on new payment methods instead of wireless or Internet companies because they don’t know what “take the lead on new payment methods” mean.
THE RISE OF THE SMARTPHONATICS
Looking at the market for mobile payments as a whole misses something: The segment of consumers that I call Smartphonatics:
Consumers who change their shopping and payment behavior as a result of owning a smartphone.
Despite the proliferation of smartphones in the US, not everyone who owns one is a Smartphonatic (smart-fa-NAT-ic). But this group is growing, and their buying power is disproportionately higher than their numbers. They’re mostly young, and relatively affluent (for their age).
In a few weeks, Aite Group will publish a report on the The Global Rise of Smartphonatics: Driving Mobile Payment and Banking Adoption based on a study of consumers in 14 countries in the Americas, EMEA, and Asia/Pacific.
Two of the key points in the report:
Smartphonatic penetration varies by country, and represents its mobile maturity level. William Gibson once said that the future is already here, it’s just unevenly distributed. That describes the interest in mobile payments perfectly. The differences in the various countries’ Smartphonatic population is a reflection of the evolution of the mobile channel in each country — and not a reflection of innate differences in attitudes and behaviors of the country’s citizens.
Demand for mobile payments isn’t “cautious.” There’s a segment of the population that is chomping at the bit to use mobile payments. And there’s a segment that couldn’t care less — for right now. There are early adopters and later adopters — but “cautious” isn’t an appropriate descriptor.