11 January 2016 by Neal Michie

Mobile payments: answering the big questions

One of the big questions in finance at the moment is “how do we get people to use mobile payments?” The arguments of “mobile’s the future” or “the kids of today will expect everything on mobile” simply miss the point. Worse, they imply that the question will somehow answer itself.

Mobile payment apps are plentiful but how do we get people using them?

Mobile is only the future if it offers something better than today. If mobile payments are to be successful long term, they must fit in with our increasingly “mobile-centric” lives. With so much interest around mobile payments at the moment: Apple Pay, Samsung Pay, Android Pay, HCE… to name a few buzz words, it is time to address the question with real answers.

Ultimately there are two challenges: getting people to try mobile payment and then keeping them using it.

Research suggests that lack of uptake is due to concerns about security, lack of usefulness, etc. Despite these concerns there is a significant proportion of mobile users that claim they want to use mobile payments – as our recent research demonstrated: 78% of Android users would like an Apple Pay-like solution on their phone.

Turning interest into payments

How do we turn that interest into actual payments? Given the high level of interest, it suggests to us that for most consumers the stated concerns are not the real barrier to them using mobile payments but an excuse. We believe that there has been a fundamental problem with the way the services are presented to consumers. This was then coupled with an enrolment process that deters even those consumers that are interested in using the service.

There has to be a clear “win” for consumers for them to take the effort to sign up for a new service; so that sign up must be quick and easier. Every step, every delay in putting the ability to pay into the hands of a consumer increases the chance they will lose interest. Those who want “everything on mobile”, want it now and the next generation will expect it as a “given”.

Those of us who focus on NFC payments have found user adoption particularly difficult. With the best will in the world, SIM based deployments have traditionally struggled to deliver the immediacy demanded by mobile users – in part caused by the need to get a new “NFC enabled” SIM card. But things are changing. HCE Payments has brought about a step change in lowering the sign-up barrier. The user enrolment and card deployment process is quick and easy. There is no reason why it shouldn’t take more than a couple of minutes from a shopper’s interest being piqued to them walking into a shop and buying something using their phone.

Already usage figures for HCE Payments are orders of magnitude higher than their SIM based equivalents as a result.

Keeping people using mobile payments

How do we stop people putting mobile payments in the bin once the novelty wears off?Once the mobile payment momentum is building, how do we keep customers using mobile payments in the long term once the initial novelty wears off?

We need to stop thinking about “virtual cards”. That metaphor limits us. If we just recreate a plastic card on a mobile phone, it cannot possibly be better than a plastic card. At best, it is the same.

By understanding the power of mobile devices, the opportunity exists to create something more than just a plastic card on the phone. The mobile brings about social connection. Its data connections allow tailored personal experiences to be created. The mobile’s sensors allow those personalised experiences to be delivered to the consumer at the relevant time. All this unlocks a truly mobile payment experience.

It is this truly mobile experience which will drive repeat usage. It will be better than cards. It will engage with the consumer. It will add value. It is what is required to compete in a “mobile-centric” world. Anything less and mobile payments will continue to be a novelty.

Have you tried to sign up for mobile payments? Did you keep using them? Let us know via neal@helixion.com or @Helixion_NFC.